If you're a taxi driver with a self-employed business you're probably anxious

about the time before the month when your tax return will be due. Since the

majority of your fares are cash-based, it can be difficult to keep track of

what are the business expenses, what's personal, and how to separate tips from

the fares. A good record-keeping system is vital not only for tax purposes,

however, but it also allows you to decide if you're getting the most of the

time you're spending in the Romford cabs.

 

 

What can you do to ensure your finances are in order? These are the top

recommendations to keep track of your finances when you're a self-employed taxi

driver.

 

Having a Cash System:

If you haven't invested in an easier payment system or are using a car with a

wireless machine most likely all of your expenses are paid in cash. Although

it's essential to ensure that your customers are happy (and it's not uncommon to

be at a drop-off location for long) it's important to come up with a way to

distinguish your tips from your fares and keep track of the fares you earn.

It doesn't need to be any complicated task as there are excellent automated

systems that can keep track of your invoices. The only thing you have to do is

to balance the books and ensure that you are aware that what was received is in

line with the amount that was invoiced.

 

Distinguishing Tips and Fares:

Tax-wise For tax purposes, tips are treated in a different manner than the fares. The

fares you earn are considered to be trade-related income and, consequently,

they're accumulated until you reach the personal allowance and at that point,

you'll need to begin paying National Insurance and income tax.

 

Tips, which are offered by customers voluntarily, can only be charged for income tax.

They are therefore not considered in determining which National Insurance band

you fall into. Incorporating your tips and fares in one place will not save you

money. make sure to keep them apart and treat them in a different way when the taxman comes to you.

 

Financial Performance:

One of the advantages of working for yourself is the ability to choose the hours

you work, but the majority of Cabs Service companies permit some flexibility

in selecting the shifts you work. Therefore your financial performance could be

a very useful indicator of which shifts you should take.

If you've got a reliable recording system, an understanding of weather conditions,

and notes about any special activities that took place or any fares that you

thought were particularly attractive you found and can make use of your data to

maximize your time in the car. You may think that you have a concept of what

the most affordable prices are, but reviewing the data may provide differently

information.

 

Expenses and Deductions:

Of course, running a Cabs Service isn't all about earning money from fares but

There are essential expenses to consider and also. As you would keep an account

of your earnings and expenses, you must also keep notes of your expenses and be

extremely careful about it. Most of the time, you can deduct everything from

your income at the end of the year which can reduce the tax burden.

 

It is essential to be aware of the cost of fuel and any food you buy while working,

and any other incidentals like tolls. The problem is that fines aren't

tax-deductible, which means you'll have to pay these yourself. Any changes or

repairs that you do to your Cabs Service will be regarded as capital expenses which means you'll receive tax relief for a couple of years. Also, you should think about your insurance for cabs since it will typically be tax-deductible as well.

The most crucial aspect of keeping track of your money is keeping the basic

information handy. It doesn't matter if you prefer keeping a ticker for your

fare and utilizing it to back up your data or prefer to write things down on

paper. It's essential to keep accurate financial documents. Not only can this

aid in reducing your tax burden and help you save money but having good

documents can help when you have a disagreement accident or a discrepancy. It

is crucial to keep an eye on the numbers!