Q: I'm currently working as a cab driver. And thinking of buying a ice cream van for the summer when the taxi is quiet. How would I be fixed for tax? As still paying payment on cab in summer? Looking to work Oct to May cab and June to Oct on ice cream van. Is this a good idea or will I pay loads of tax?
Dec 20 2005
Answered by: Clive Lewis Ask a question
The ice cream van business will be treated separately to your activities as a cab driver for tax purposes. Any profits from the ice cream business will be taxed under Income Tax rules. As you have a business you should be aware of the records you need to keep. You have three months from the date of commencement to notify your Tax District that you have started another business. At the end of the tax year in which you commenced the ice cream van business you must complete a Tax Return. The return will then have two “Self Employment” sections one for the cab driver business and one for the ice cream van business. If you buy equipment, such as the ice cream van, you are allowed a proportion of the cost (called capital allowances) as a deduction from your profits for tax purposes. The profits after capital allowances of both businesses will be added together to determine the total amount of tax. For 2005/6 if your total taxable income exceeds your personal allowance of £4,895, you start paying tax firstly at 10% (on first £2090) then 22% (on next £30,310) and if the total exceeds £32,400, the excess is chargeable at the higher rate of Income Tax (40%)
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