Newbie taxi driver - Ltd company versus sole trader?

fintans said:
When you file your VAT return for fares you can deduct your VAT outgoings such as petrol, car repairs, expenses associated with running your business etc so you don't have to give 21% to the tax man.
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Apparently VAT on petrol is not reclaimable.
 
Daffyduck said:
The Vat thing has interested me there, if it was a company and the taxi end was only part of the income, could one claim vat back??
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If a business ( company or otherwise ) is carrying on both exempt and VATable activities then they would have to be registered for VAT if over the relevant thresholds for the VATable business. A good example here would be an undertaker / publican ( of which there would be quite a few around the country ) Undertaking is VAT exempt. If there were items of shared costs, e.g. one ESB bill for the whole premises then the portion relating to the VATable business would be claimed as an input credit. The VAT on the portion relating to the undertaking would not be claimable, as that part of the business is VAT exempt. In both cases of course, the charges for ESB are tax ( income or corporation tax ) deductible. One cannot, and should not, attempt to claim VAT on anything to do with a VAT exempt activity.
 
Graham_07 said:
but not in the context of a taxi operator as per the OP which is a VAT exempt activity.
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Of course. I should have rephrased my previous post. I was referring to a general situation where vat can be claimed on diesel.
 
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