Hi All

Can anyone out there in UKRM land advise me on the following tax questions


In addition to my regular, full time PAYE main employment I am in the 
process of becoming a motorcycle instructor and I understand that may 
need to register as a sole trader. In my main employment I am currently 
paying income tax at the higher rate of 40%. The work as a trainer 
currently pays £62.50 per session and as I intend to work only weekends 
gives an absolute maximum anticipated earnings of £6500.  I know this 
isn't a huge amount (in fact it's barely above minimum wage), and I 
could easily earn more than this working weekends for my employer but, 
for me this isn't all about £. However I will need to cover my costs and 
don't want any nasty tax-a-grams

Once qualified, my license to instruct will tie me to a single company 
i.e. I will not be able to work as a motorcycle instructor for any other 
company or organisation. Does this make me an employee of the training 
company or can I still be classified as a sole trader?

As an instructor, I will be using my own (fully paid for) motorcycle, 
however the company I will be working with does not offer mileage or 
running costs. I anticipate that I will ride approximately 25 miles per 
session on public roads as an instructor plus an additional 6 miles per 
session between my home address and the training centre. The anticipated 
annual business mileage will be considerably below 10,000

Given this circumstance, Can I claim 40p per mile for any of this 
mileage from the Inland Revenue? (My engine capacity is 1130cc)

I will not be using my motorcycle exclusively for my work as an 
instructor, however time pressures will inevitably mean that the vast 
majority of the time spent on my motorcycle will be related to my 
instructor role. Given that, can you please advise me on the best way to 
account for the following costs

Training Fee:

£150 paid in July (receipted) - The total cost of training is £300, It 
is anticipated that once qualified, I will work a number of sessions 
free to repay the outstanding £150 – would it be better to pay this cost 
outright and start earning immediately?

Spares / Repairs – costs incurred to maintain my motorcycle including 
tyres (Some expense already incurred for a new battery)

Personal Equipment – Replacement Crash Helmet, Jacket, Trousers, Gloves, 
Boots (No expense incurred to date but certainly anticipated)

Legal Costs: Costs for MOT & Road Find License (I am covered by the 
training companies insurance whilst instructing)

Many Thanks


Allan

garlicmonster  gurgled happily,
sounding much like they were saying:

> Can anyone out there in UKRM land advise me on the following tax
> questions

IANAA

> In addition to my regular, full time PAYE main employment I am in the
> process of becoming a motorcycle instructor and I understand that may
> need to register as a sole trader. In my main employment I am currently
> paying income tax at the higher rate of 40%. The work as a trainer
> currently pays £62.50 per session and as I intend to work only weekends
> gives an absolute maximum anticipated earnings of £6500.  I know this
> isn't a huge amount (in fact it's barely above minimum wage)

How long's each "session"? Minimum wage is just under £6/hr now.

> As an instructor, I will be using my own (fully paid for) motorcycle,
> however the company I will be working with does not offer mileage or
> running costs. I anticipate that I will ride approximately 25 miles per
> session on public roads as an instructor plus an additional 6 miles per
> session between my home address and the training centre. The anticipated
> annual business mileage will be considerably below 10,000
> 
> Given this circumstance, Can I claim 40p per mile for any of this
> mileage from the Inland Revenue? (My engine capacity is 1130cc)

Aren't bikes 24p/mile?

> I will not be using my motorcycle exclusively for my work as an
> instructor, however time pressures will inevitably mean that the vast
> majority of the time spent on my motorcycle will be related to my
> instructor role. Given that, can you please advise me on the best way to
> account for the following costs
> 
> Training Fee:
> 
> £150 paid in July (receipted) - The total cost of training is £300, It
> is anticipated that once qualified, I will work a number of sessions
> free to repay the outstanding £150 – would it be better to pay this cost
> outright and start earning immediately?

Won't make a difference, because it's the year end figure that matters.

> Spares / Repairs – costs incurred to maintain my motorcycle including
> tyres (Some expense already incurred for a new battery)

Covered by the mileage figure.

> Personal Equipment – Replacement Crash Helmet, Jacket, Trousers, Gloves,
> Boots (No expense incurred to date but certainly anticipated)

If it's specifically for the instructing, yes. Otherwise you might be 
able to pro-rata it, according to the split between your personal and 
business mileage.

> Legal Costs: Costs for MOT & Road Find License (I am covered by the
> training companies insurance whilst instructing)

Covered by the mileage figure.

As for tax - you just need to do self-assessment at year end.

On 29 Sep 2008 09:13:50 GMT, Adrian  squeezed
out the following:

>garlicmonster  gurgled happily,
>sounding much like they were saying:

>> Spares / Repairs – costs incurred to maintain my motorcycle including
>> tyres (Some expense already incurred for a new battery)
>
>Covered by the mileage figure.

Only if he claims the mileage figure. That might not be his best bet.

-- 
Colin Irvine
ZZR1400 BOF#33 BONY#34 COFF#06 BHaLC#5
http://www.colinandpat.co.uk

Colin Irvine  gurgled happily, sounding much
like they were saying:

>>> Spares / Repairs – costs incurred to maintain my motorcycle including
>>> tyres (Some expense already incurred for a new battery)

>>Covered by the mileage figure.

> Only if he claims the mileage figure. That might not be his best bet.

True. What's the benefit-in-kind score on a bike?

On 29 Sep 2008 09:44:08 GMT, Adrian  squeezed
out the following:

>Colin Irvine  gurgled happily, sounding much
>like they were saying:
>
>>>> Spares / Repairs ? costs incurred to maintain my motorcycle including
>>>> tyres (Some expense already incurred for a new battery)
>
>>>Covered by the mileage figure.
>
>> Only if he claims the mileage figure. That might not be his best bet.
>
>True. What's the benefit-in-kind score on a bike?

Dunno! I do know the "EKS for just one employer" itself is a bit of a
minefield, and the answer to that'll largely dictate the rest of it -
so the OP really needs someone who knows all this in detail.

-- 
Colin Irvine
ZZR1400 BOF#33 BONY#34 COFF#06 BHaLC#5
http://www.colinandpat.co.uk

Colin Irvine  gurgled happily, sounding much
like they were saying:

>>>>> Spares / Repairs ? costs incurred to maintain my motorcycle
>>>>> including tyres (Some expense already incurred for a new battery)

>>>>Covered by the mileage figure.

>>> Only if he claims the mileage figure. That might not be his best bet.

>>True. What's the benefit-in-kind score on a bike?

> Dunno! I do know the "EKS for just one employer" itself is a bit of a
> minefield

IR35? Don't think that's going to be an issue, for two reasons - mainly 
because he's clearly not a disguised employee, since he'll be retaining 
the day job - but also because he's not a limited company, so there's no 
question of doing the dividends-instead-of-salary payment route.

On 29 Sep 2008 11:09:31 GMT, Adrian  squeezed
out the following:

>Colin Irvine  gurgled happily, sounding much
>like they were saying:
>
>>>>>> Spares / Repairs ? costs incurred to maintain my motorcycle
>>>>>> including tyres (Some expense already incurred for a new battery)
>
>>>>>Covered by the mileage figure.
>
>>>> Only if he claims the mileage figure. That might not be his best bet.
>
>>>True. What's the benefit-in-kind score on a bike?
>
>> Dunno! I do know the "EKS for just one employer" itself is a bit of a
>> minefield
>
>IR35? Don't think that's going to be an issue

You may well be right, although

> for two reasons - mainly 
>because he's clearly not a disguised employee, since he'll be retaining 
>the day job

plenty of people have day-jobs and evening/weekend jobs with different
employers - the IR tend to pick one for the tax code and set the other
code as BR

> - but also because he's not a limited company, so there's no 
>question of doing the dividends-instead-of-salary payment route.

but there are (or were when I last looked at it) other tax advantages
to being self-employed - such as more costs [1] you can claim against
tax.

[1] the journey to work, specifically mentioned by the OP, being one
of them, and workwear another.

-- 
Colin Irvine
ZZR1400 BOF#33 BONY#34 COFF#06 BHaLC#5
http://www.colinandpat.co.uk

On 29 Sep, 09:51, garlicmonster 
wrote:
> Hi All
>
> Can anyone out there in UKRM land advise me on the following tax questions
>
> In addition to my regular, full time PAYE main employment I am in the
> process of becoming a motorcycle instructor and I understand that may
> need to register as a sole trader. In my main employment I am currently
> paying income tax at the higher rate of 40%. The work as a trainer
> currently pays £62.50 per session and as I intend to work only weekends
> gives an absolute maximum anticipated earnings of £6500.  I know this
> isn't a huge amount (in fact it's barely above minimum wage), and I
> could easily earn more than this working weekends for my employer but,
> for me this isn't all about £. However I will need to cover my costs and
> don't want any nasty tax-a-grams
>
> Once qualified, my license to instruct will tie me to a single company
> i.e. I will not be able to work as a motorcycle instructor for any other
> company or organisation. Does this make me an employee of the training
> company or can I still be classified as a sole trader?
>
> As an instructor, I will be using my own (fully paid for) motorcycle,
> however the company I will be working with does not offer mileage or
> running costs. I anticipate that I will ride approximately 25 miles per
> session on public roads as an instructor plus an additional 6 miles per
> session between my home address and the training centre. The anticipated
> annual business mileage will be considerably below 10,000
>
> Given this circumstance, Can I claim 40p per mile for any of this
> mileage from the Inland Revenue? (My engine capacity is 1130cc)
>
> I will not be using my motorcycle exclusively for my work as an
> instructor, however time pressures will inevitably mean that the vast
> majority of the time spent on my motorcycle will be related to my
> instructor role. Given that, can you please advise me on the best way to
> account for the following costs
>
> Training Fee:
>
> £150 paid in July (receipted) - The total cost of training is £300, It
> is anticipated that once qualified, I will work a number of sessions
> free to repay the outstanding £150 – would it be better to pay this cost
> outright and start earning immediately?
>
> Spares / Repairs – costs incurred to maintain my motorcycle including
> tyres (Some expense already incurred for a new battery)
>
> Personal Equipment – Replacement Crash Helmet, Jacket, Trousers, Gloves> Boots (No expense incurred to date but certainly anticipated)
>
> Legal Costs: Costs for MOT & Road Find License (I am covered by the
> training companies insurance whilst instructing)
How will you be paid - will you Invoice them each month or will they
pay you on a payslip?

Steve

"garlicmonster"  wrote in message 
news:1G0Ek.5649$8n3.838@newsfe09.ams2...
> Hi All
>
>
> Once qualified, my license to instruct will tie me to a single company 
> i.e. I will not be able to work as a motorcycle instructor for any other 
> company or organisation.

Why ?
-- 
Vass

"Vass"  wrote in message 
news:V9mdnVpIP9Idb33VnZ2dnUVZ8sjinZ2d@eclipse.net.uk...
>
> "garlicmonster"  wrote in message 
> news:1G0Ek.5649$8n3.838@newsfe09.ams2...
>> Hi All
>>
>>
>> Once qualified, my license to instruct will tie me to a single company 
>> i.e. I will not be able to work as a motorcycle instructor for any other 
>> company or organisation.
>
> Why ?
> -- 
> Vass
>
>
>
If you are self employed this sounds like unfair restriction of trade!

Paul

garlicmonster wrote:
> Hi All
> 
> Can anyone out there in UKRM land advise me on the following tax questions
> 
> 

Having read this lot, spoken to the tax office and investigated 
www.hmrc.gov.uk/calcs/esi My understanding is that I will be considered 
self employed

I will be paid by the training company on submission of invoice

I can claim either 24p / mile for petrol, maintenance &  running costs 
or keep all petrol all relavent receipts and assess the business / 
private % of each at year end and claim the full value from the revenue.

I may also claim the full value of any clothing such as helmet, gloves 
etc providing that they are used exclusively for the training role.

Any / all training fees / petrol / mileage incurred upto the start of 
trading is inadmissible.  Ongoing training will, however be ok to submit

If I make a loss then the value of that loss may be offset against my 
PAYE tax code at whatever tax rate I am paying

Profits will be taxed at my PAYE rate too


Do the assembled feel that this is a fair understanding of the position ?

Thanks again

Allan

garlicmonster wrote:
>> Hi All
>> 
>> Can anyone out there in UKRM land advise me on the following tax questions
>
>Having read this lot, spoken to the tax office and investigated 
>www.hmrc.gov.uk/calcs/esi My understanding is that I will be considered 
>self employed
>
>I will be paid by the training company on submission of invoice
>
>I can claim either 24p / mile for petrol, maintenance &  running costs 
>or keep all petrol all relavent receipts and assess the business / 
>private % of each at year end and claim the full value from the revenue.

Keep a spreadsheet, and check how much your insurance is with/without the
business/training use part so you can potentially claim the difference as
well.

>I may also claim the full value of any clothing such as helmet, gloves 
>etc providing that they are used exclusively for the training role.

Did they mention if you can claim the clothing pro-rata if you use it outside
the training role? There may well be a slight "struggle" convincing HMRC that
you are using it for training only.

>Any / all training fees / petrol / mileage incurred upto the start of 
>trading is inadmissible.  Ongoing training will, however be ok to submit

That's normal.

>If I make a loss then the value of that loss may be offset against my 
>PAYE tax code at whatever tax rate I am paying

That's normal.

>Profits will be taxed at my PAYE rate too

That's normal.

>Do the assembled feel that this is a fair understanding of the position ?

Pretty much, yes.

-- 
Message posted via MotorcycleKB.com
http://www.motorcyclekb.com/Uwe/Forums.aspx/uk-motorcycle/200809/1

Adrian wrote:


> How long's each "session"? Minimum wage is just under £6/hr now.

Usually start around 8am, finish anytime from 16:00 - 18:00 depending on 
   how quickly the students progress, so worst case could be a 10 hr day 
for £62.50

Allan

"garlicmonster"  wrote in message 
news:1G0Ek.5649$8n3.838@newsfe09.ams2...
> Hi All
>
> Can anyone out there in UKRM land advise me on the following tax questions
>
> In addition to my regular, full time PAYE main employment I am in the 
> process of becoming a motorcycle instructor...

In addition to my regular, full time PAYE main employment I worked as a 
diving instructor for four years (occasional evenings & weekends).  The IR 
were very helpful when I rang them to discuss the tax implications and were 
very happy to explain everything I could and could not claim for which was 
basically 40% of anything I spent in the course of my work, including some 
scuba kit which I used solely for training purposes.  I worked for a single 
'employer' throughout and was registered self-employed.  I never had a 
single query and claimed back about £5k during that time.

Call them - they're surprisingly useful and absolutely free. They want you 
to get your tax right just as much as you do - so they claim!
-- 
R.

On Mon, 29 Sep 2008 17:24:56 +0100, garlicmonster
 squeezed out the following:

>garlicmonster wrote:
>> Hi All
>> 
>> Can anyone out there in UKRM land advise me on the following tax questions
>> 
>Having read this lot, spoken to the tax office and investigated 
>www.hmrc.gov.uk/calcs/esi.htm

That's a useful link, thanks.

> My understanding is that I will be considered 
>self employed

Good.

>I will be paid by the training company on submission of invoice
>
>I can claim either 24p / mile for petrol, maintenance &  running costs 
>or keep all petrol all relavent receipts and assess the business / 
>private % of each at year end and claim the full value from the revenue.
>
>I may also claim the full value of any clothing such as helmet, gloves 
>etc providing that they are used exclusively for the training role.

As Timo says, it might pay you to look into this a bit more.

>Any / all training fees / petrol / mileage incurred upto the start of 
>trading is inadmissible.  Ongoing training will, however be ok to submit
>
>If I make a loss then the value of that loss may be offset against my 
>PAYE tax code at whatever tax rate I am paying
>
>Profits will be taxed at my PAYE rate too
>
>Do the assembled feel that this is a fair understanding of the position ?

Yep.

-- 
Colin Irvine
ZZR1400 BOF#33 BONY#34 COFF#06 BHaLC#5
http://www.colinandpat.co.uk

"garlicmonster"  wrote in message 
news:sj7Ek.30594$v97.2301@newsfe23.ams2...
> garlicmonster wrote:
>
> I may also claim the full value of any clothing such as helmet, gloves etc 
> providing that they are used exclusively for the training role.

Yes, and things like public liability insurance, membership of professional 
bodies, etc.  I used to claim for anything necessarily incurred in the 
course of trading which wouldn't otherwise have been, I submitted detailed 
accounts and never got pulled up once.

> Do the assembled feel that this is a fair understanding of the position ?

Like everyone else said, yes.
-- 
R.

On 29 Sep, 17:36, "The Longhaired Boxhead via MotorcycleKB.com"
<u33672@uwe> wrote:

> Did they mention if you can claim the clothing pro-rata if you use it outside
> the training role? There may well be a slight "struggle" convincing HMRC that
> you are using it for training only.
>

They were very specific on this.  There is no pro rata arrangement for
this clothing/equipment it seems that unless you are using the
clothing 100% for the business you cannot claim any portion of the
costs

Allan

> Call them - they're surprisingly useful and absolutely free. They want you
> to get your tax right just as much as you do - so they claim!
> --
> R.

I called them twice today and apart from the inevitable delay
connecting, I have found them very helpful and approachable, even
found one with a sense of humour !!

I stressed that I was keen to set this up properly and they seemed
very happy to provide a lot of useful information.  I did get a bit
lost when they started to explain the alternative method of claiming
vehicle costs so I may just go for the simpler 24p / mile route.

I'm also going to make an appointment with a tame accountant who's
been recommended to me

Allan

garlicmonster@googlemail.com wrote:
> 
> They were very specific on this.  There is no pro rata arrangement for
> this clothing/equipment it seems that unless you are using the
> clothing 100% for the business you cannot claim any portion of the
> costs

What about if you had a separate set just for business use?

-- 
Eddie                                                eddie@deguello.org

His: ZX-9R, Elefant 900                   http://www.last.fm/group/ukrm
Hers: Monster S4R, GSX600F (breaking, everything must go!)

"Eddie"  wrote in message 
news:7a08r5-nim.ln1@deguello.org...
> garlicmonster@googlemail.com wrote:
>>
>> They were very specific on this.  There is no pro rata arrangement for
>> this clothing/equipment it seems that unless you are using the
>> clothing 100% for the business you cannot claim any portion of the
>> costs
>
> What about if you had a separate set just for business use?

The IR confirmed I could claim for a £500 set of scuba regulators and gauges 
on the basis that I needed them for teaching purposes because my usual ones 
were non-standard[1] and therefore unsuitable for demonstrating to students. 
I had a choice, as I recall, of claiming back 40% as tax relief in one go or 
amortising (is that the right word?) the entire amount over three (or five?) 
years (can't remember which).

Worth bearing this sort of thing in mind, perhaps.

[1] DIN vs. A-clamp.
-- 
R.

garlicmonster  wrote:

> Adrian wrote:
> 
> 
> > How long's each "session"? Minimum wage is just under £6/hr now.
> 
> Usually start around 8am, finish anytime from 16:00 - 18:00 depending on
>    how quickly the students progress, so worst case could be a 10 hr day
> for £62.50

Why bother?


-- 
SteveH 'You're not a real petrolhead unless you've owned an Alfa Romeo'
www.italiancar.co.uk - Alfa 156 TSpark Sportwagon Veloce Selespeed
Alfa 156 TSpark Lusso - Alfa 75 TSpark Lusso - Ducati 750SS

On Mon, 29 Sep 2008 23:27:12 +0100, "Rudy Lacchin"
 squeezed out the following:

>"Eddie"  wrote in message 
>news:7a08r5-nim.ln1@deguello.org...
>> garlicmonster@googlemail.com wrote:
>>>
>>> They were very specific on this.  There is no pro rata arrangement for
>>> this clothing/equipment it seems that unless you are using the
>>> clothing 100% for the business you cannot claim any portion of the
>>> costs
>>
>> What about if you had a separate set just for business use?
>
>The IR confirmed I could claim for a £500 set of scuba regulators and gauges 
>on the basis that I needed them for teaching purposes because my usual ones 
>were non-standard[1] and therefore unsuitable for demonstrating to students. 
>I had a choice, as I recall, of claiming back 40% as tax relief in one go or 
>amortising (is that the right word?) the entire amount over three (or five?) 
>years (can't remember which).
>
>Worth bearing this sort of thing in mind, perhaps.
>
>[1] DIN vs. A-clamp.

HMRC look on clothing differently to everything else. Because we all
need clothes anyway they apply the "wholly & exclusively" test pretty
rigorously, with no allowance made for dual (business and private)
use.

See http://www.hmrc.gov.uk/manuals/bimmanual/BIM37910.htm for more
detail.

-- 
Colin Irvine
ZZR1400 BOF#33 BONY#34 COFF#06 BHaLC#5
http://www.colinandpat.co.uk

On Mon, 29 Sep 2008 23:09:43 +0100, Eddie 
squeezed out the following:

>garlicmonster@googlemail.com wrote:
>> 
>> They were very specific on this.  There is no pro rata arrangement for
>> this clothing/equipment it seems that unless you are using the
>> clothing 100% for the business you cannot claim any portion of the
>> costs
>
>What about if you had a separate set just for business use?

I don't think that would work, as it would be an arrangement born of
choice rather than necessity.

-- 
Colin Irvine
ZZR1400 BOF#33 BONY#34 COFF#06 BHaLC#5
http://www.colinandpat.co.uk

steve@italiancar.co.uk (SteveH) wrote in news:1io1zo6.105i1ot1cmztxcN%
steve@italiancar.co.uk:

> garlicmonster  wrote:
> 
>> Adrian wrote:
>> 
>> 
>> > How long's each "session"? Minimum wage is just under £6/hr now.
>> 
>> Usually start around 8am, finish anytime from 16:00 - 18:00 depending on
>>    how quickly the students progress, so worst case could be a 10 hr day
>> for £62.50
> 
> Why bother?
> 
> 

Not everyone wants to use the retail management model to seek a constant 
supply of impressionable teenagers.

-- 
wessie at tesco dot net

BMW R1150GS

Rudy Lacchin wrote:

> "Eddie"  wrote in message
> news:7a08r5-nim.ln1@deguello.org...
> > garlicmonster@googlemail.com wrote:
> > > 
> > > They were very specific on this.  There is no pro rata
> > > arrangement for this clothing/equipment it seems that unless you
> > > are using the clothing 100% for the business you cannot claim any
> > > portion of the costs
> > 
> > What about if you had a separate set just for business use?
> 
> The IR confirmed I could claim for a £500 set of scuba regulators and
> gauges on the basis that I needed them for teaching purposes 

I must stop reading this early in the morning.  I was just wondering
where I could go to watch your trained porpoises perform.

--