Buying a business, need a few pointers please

[Smartie]

wouldn't you be better operating the rank as an "agency" and having each taxi as a self employed entity (3 x sole traders) and paying you a rent? That way you could avoid VAT altogether?

[Tyre Smoke]

It's an option smartie, but it used to be run that way and it makes more money by employing drivers and paying a wage.

[Smartie]

Been taking tips from Steve MacDonald then?

Just an idea, at least you've considered it!

[Eric Mc]

The VAT man can be very wary of businesses run on an agency basis with an army of "Self Employed" contractors providing the labour element of the business - especially if some or all of the individuals involved are trading below the compulsory VAT registration threshold.

They call it "Disaggregation" and they don't like it one bit.

[Smartie]

Being a self-employed taxi driver is not an unusual scenario though and they pretty much meet the requiremnts of self-employment, ie many costomers, own hours, own insurance, etc, etc

[Eric Mc]

This is not a "Self Employment" point - it is a VAT disagregagtion point. It is not an unusual situation in the taxi world but VAT officers do keep an eye on these operations, especially if to the outside world it looks like a "Single Operation" rather than multiple "Sole Traders".