New start-ups self-employed cab drivers

If you are thinking of leaving your day or night job to become a cab driver then you have come to right place. Are you the right man / woman for the job? How many hours would you be working? What will you take home after paying the tax man?

This guide will show you what you need to know and how to become a successful freelance taxi or minicab driver.

Being a self-employed taxi driver isn’t for everyone, but if you have the ability to handle difficult passengers while remaining calm, it could be the perfect job for you.

Useful skills for a freelance taxi driver to have:

• Excellent road knowledge
• Great driving skills
• Knowledge of and compliance to the highway code
• Politeness
• Excellent arithmetic skills or a small calculator to assist you with accepting fares

What other qualifications and training are required?

Age

To become a licensed taxi driver, you need to be over the age of 21, and have had your full UK driving license for at least a year.

Choose your cab

There are two main routes to take to becoming a freelance taxi driver:

• Black cab: A black cab also known as cab or London taxi features a taxi light, and a fare meter which rises the longer you drive a passenger for.
• Private Hire Vehicle: More commonly known as a minicab, a Private Hire Vehicle must be pre-booked, and
  the price is set at the beginning of the journey.

Getting licensed – local council authorities

You will require permission from your local council where you are hoping to place your business. Each local council has its own rules so please have a look at their website for cab licences. If they require you to take a test then you have to pre-book it. You should also look at their licence fees.

The normal assessment includes things like eyesight tests, practical driving tests, and questions on the Highway Code.

You’ll also have the option to take a wheelchair test to decide if you’re allowed to carry passengers in wheelchairs. You must have a wheelchair accessible vehicle to complete this test.

You’ll also need to have a CRB check before being allowed to drive as a self-employed taxi driver.

Becoming a black cab driver in London

In London, hackney-carriage drivers have to pass a test called The Knowledge to demonstrate that they have an intimate knowledge of the geography of London streets, important buildings, etc. Learning The Knowledge allows the driver to become a member of the Worshipful Company of Hackney Carriage Drivers.

There are two types of badge, a yellow one for the suburban areas and a green one for all of London. The latter is considered far more difficult. Drivers who own their cabs as opposed to renting from a garage are known as “mushers” and those who have just passed the “knowledge” are known as “butter boys”. There are currently around 21,000 black cabs in London, licensed by the Public Carriage Office.

It can take anywhere between two and four years to complete, but the ability to pick up passengers without them having to pre-book, and with the fare meter ensuring fares are often higher than minicabs, being a self-employed black cab driver can be a lucrative career.

How to find work as a self-employed taxi driver

• Work at a taxi firm: Most minicab drivers start their career by working at a taxi firm on a freelance basis. You should get a decent amount of work from the start, since they have existing customer bases.
• Join a company like Uber: Uber are the modern alternative to working at a taxi firm. They allow passengers to book a taxi through an app on their mobile phones.
• Make business cards: Include your contact details along with the name of the taxi firm you work with and give them to family, friends, and customers so that they’ll remember you next time.

Bookkeeping and accounting for self-employed taxi drivers

When you start to work as a self-employed driver, you have to register with HMRC for self- assessment. The easiest way to register with HRMC is through their online portal. You should register by 31 October following the end of the tax year in which you started to work. If you started to work on 28 February 2017 then you have until 31 October 2017 to register with HMRC without incurring any penalties.

Once you are registered HMRC will post you your Unique Taxpayer Reference (UTR) number. You should send us a copy of your UTR number as we will require this before we can file your personal tax return.

Records of income and expenditure should be kept which will form the basis of preparing the year-end accounts and subsequently into your tax return. As HMRC could request documentation for up to 6 years, we do suggest that receipts are stored in a safe place.

To help you do the bookkeeping we have prepared an Excel spreadsheet for you which can be downloaded from our website for free.

How London Cab Accountants differ

London Cab Accountants provides a low cost solution to all your bookkeeping, accounting and tax problems. We are a specialist accountancy provider for services designed just for cab drivers and taxi drivers.

Upon joining up you will be benefitting from the following:

• Your named accountant
• Telephone access to your accountant
• Unlimited 24/7 email support
• HMRC registrations
• Free bookkeeping software and advice
• Set of financial statements upon completion
• Preparation and filing of personal tax return

Our prices have been set for the above services so that it is affordable. If you require any further additional services, then please let your accountant know so that a quote can be provided to you.