There are varying lengths that a Taxi Driver should keep its documents for, for different areas of tax. However, six years is the longest of them all, so it would be best practice to stick to this time frame.
HMRC is not very precise about the format of records a business should keep. There is no difference as to whether a trader uses a manual cashbook or sophisticated IT programme.
Below is a comprehensive list of the most common expenses a Taxi Driver can claim.
- Petrol or diesel costs
- Repairs, servicing and running the taxi
- The costs of your annual road tax and your MOT test
- The cost of washing or cleaning your own taxi
- Interest on any bank or personal loans taken out to purchase your taxi
- Your license and any other registration fees
- The cost of running your office (if you have one) or use of your home
- Vehicle insurance
- AA/RAC membership
- Radio hire
- Accountancy fees
- Advertising
- Phone usage for business
- Parking & toll fees
Other Claims and Allowances
Capital Allowances can also be claimed for the cost of the vehicle, the rate is 18% per year. Other assets used for the taxi business may also be claimed.
An alternative to claiming the vehicle running costs is the HMRC’s Fixed Scale Mileage Rate which is currently 45p per mile for the first 10,000 and 25p thereafter. This includes a depreciation allowance (capital allowance) for the vehicle but does not include interest on any loan to purchases the vehicle. This can be claimed in addition to the mileage allowance.
Please note: If you use your vehicle for your own personal use then you need to factor this in when any expenses are claimed. For example if you calculate that you use your vehicle 30% of the time for personal or family use, then you would need to reduce any relevant vehicle running expenses by 30%.
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