Driving Instructor Query
T.C.
Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙♂️
I have a driving instructor client. He is now "contracting" some work to another instructor. My client is getting the work, providing the other instructor with a car and then just taking a percentage of his earnings. Obviously my client has the expense of providing the car etc, but are there are other rules I have missed concerning the "commission" side of this. Views appreciated.
0
Comments
-
How does this work from insurance point of view?
I'd make sure your client makes sure their subcontractor has the relevant cover.
Can't think of much else from a commision point of view...0 -
So from the tax side of things, ok to enter income to my client as, say £50, for the week. I don't need to enter £500 as income, less payment made to subbie driver of £450, leaving £50 profit.
Just not sure what the income is - £50 (the commission paid to my client) or
the £500 total received less expenses paid to subbie driver
Help please!
Oh, and is the subcontract driver strictly self-employed anyway????0 -
Sounds like the latter to me and potentially a VAT registration problem for a business that already has very tight margins..0
-
So from the tax side of things, ok to enter income to my client as, say £50, for the week. I don't need to enter £500 as income, less payment made to subbie driver of £450, leaving £50 profit.
Just not sure what the income is - £50 (the commission paid to my client) or
the £500 total received less expenses paid to subbie driver
Help please!
Oh, and is the subcontract driver strictly self-employed anyway????
who is the learner driver a customer of? Thats the question, is it the sub contractor or your client?
Hopefully this should be fairly clear to them and that'll be your answer.
With insurance, its always worth a question to your insurers. We're currently being sued for work done by a subcontractor! Because we were contracted by the owner of the land to do the work. So then we have to counter sue the sub contracter and hope to hell they are the relevant cover. But hopefully this won't apply to your client.0 -
Oh thanks. I will get back to my client.0
-
I think I have opened a can of worms now on employment status - http://www.hmrc.gov.uk/manuals/vtaxpermanual/VTAXPER66300.htm
Oh no, more problems!0 -
I missed this thread for some reason - my first thought is are they truly self employed? It will come back to bite your client not the 'employee' if they are actually deemed to be an employee. Given this seems to be a specific area for HMRC then I would just go with the guidance and if your client has to employ, then that's what needs to happen.
If they are self employed, then if the student pays your client (the School) then all of the revenue is their turnover and the pay to the instructor is a direct expense. This turnover would count towards the VAT threshold.
I think this one needs looking at very carefully!0 -
Yes, I think so too, but glad you agree. I will dig deeper!0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 318 NEW! Qualifications 2022
- 161 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 87 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership