Published on July 3rd, 2014 | by Pete1
How to manage your personal finances as a self-employed taxi driver
Choosing to work as a self-employed taxi driver has many perks. You’re essentially your own boss and you can choose to work as little or as often as you like; providing that your bills are paid of course!
However, some of the more difficult aspects of working as a self-employed taxi driver include managing your finances, taxes and insurance.
Taking control of these things can be a huge challenge, especially if you’ve never had to face them before. Here insureTAXI, a leading a taxi insurance broker with over 10 years’ experience, have provided their top tips to help you on your way.
Have a structure
To manage your finances effectively it’s essential that you have some sort of system in place. It doesn’t need to be overly complicated but you should ensure that you keep a clear record of your expenses, receipts, tickets, fares and tips etc.
Without a reliable system, it can be hard to know whether you’re coming or going. Keeping on tops of this throughout the year will ensure that you can prove your income and pay the correct amount to the tax man. Almost all of your expenses can be deducted from your income and failure to keep your receipts etc. may mean that you end up paying out much more than you need to!
Separate tips and fares
When it comes to your tax return, tips and fares are treated very differently so it’s important that you can easily distinguish between the two. Any fares will add up to your total income on which you’ll pay income tax and national insurance. Tips, on the other hand, are viewed as a gift from the customer and are only liable for income tax. Keeping a clear record of each of these throughout the year will make taxi returns much more straightforward.
Get fully protected
As a taxi driver you need much more than just simple vehicle insurance. There are many other forms of cover to consider including public and employers liability, income protection, personal accident insurance, breakdown cover and much more!
The amount of different options you choose will affect your premium but remember, like many other expenses, it may be classed as taxi deductible. Not taking out necessary cover to save money is false economy as it could leave you seriously out of pocket in the event of a claim. A specialist broker like insureTAXI can help you to way up the benefits of certain policies and will even shop around for a cheap quote on your behalf too!
Choose a reputable accountant
An accountant will ensure that you are not underpaying or overpaying tax to help you take control of your finances. They are the professionals and will provide advice and deal with the all the numbers so that you don’t have to. Many accountancy firms now offer low cost, all-inclusive packages to self-employed taxi drivers so it doesn’t need to break the bank either.
For more information about insureTAXI visit www.insuretaxi.com. You can also keep up with some of the latest industry news via their blog page or by following them on twitter @insuretaxi.