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HMRC internal manual

VAT Taxable Person Manual

Particular trades: taxi and hire cars: questions to ask the trader

The taxi and hire car trade is characterised by a lack of paperwork. It is therefore vital that you ascertain the full facts, by asking all the following questions, before attempting to make your decision.

  1. Who owns the cars?
  2. If the firm owns the vehicles, where are they kept? Are they available for the private use of drivers?
  3. Who has to bear the following expenses:
* insurance; 
* maintenance of the car; 
* taxing the car; 
* fuel costs? 
  1. How is the money retained by the cab firm calculated; is it a fixed hourly or weekly rate, or an agreed split of the takings?
  2. To whom do customers pay cheques?
  3. Who bears the loss if customers do not pay, or dishonour a cheque?
  4. Do vehicles bear the company logo?
  5. If the firm owns the vehicles, how many vehicles are there, and how many drivers?
  6. If there are more drivers than vehicles, who draws up the roster? Does the firm instruct drivers to be available for work at particular times?
  7. What rules does the firm stipulate for its drivers? Are standards insisted on for dress, cleanliness of vehicle, etc?
  8. Can a driver refuse a fare offered by the cab firm?
  9. What records does the cab firm keep in relation to the driver’s work; can it accurately calculate how much they have earned in any given period?
  10. Who sets the prices for customers?