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Category: Benefits

Car Hire Business And Taxes

You travel into another state in the country, you realize it would have been better if you rented a car, and then you think of an idea “, Hey, why not start a car hire business of my own?” But of course, aside from having a car, there are more things to know before you invest your money into this kind of business.
Car hire business has become of the major commerce, not only in the country, but also internationally speaking. These businesses exist because of two main markets – other businesses needing occasional hire or fleets and the tourist market. The advantages of renting a car instead of buying one is drastically increasing through time. You can probably enjoy the latest BMW model for ¼ of the selling prices.

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How does a car hiring business make so much money?

The simplest and most obvious answer is that these businesses collect a lot of cars, of different models and brands. And because of this, the carmakers allocate them huge discounts. They also have to make sure that these cars will not just be put on display just to be covered by dust, but to be actually used all the time. Companies also get good resales when they unload the cars 20, 000 or 25, 000 miles later. If you keep the two main keys of earning money through this kind of business, there is a great possibility that it will endure and expand through time.

How do people start a car hiring business?

Like any other commerce, car rental business has a series of steps to follow to be able to run smoothly in the future and not go bankrupt within the first week of its opening.

1. You’ll have to think of what type of car rental business you want to put your attention to. There are actually different types of this business. Either you rent you cars for special occasions like weddings and proms, for businessmen who are staying in the vicinity for a significant time or for tourists who want to explore the city by themselves.
2. Build a car flock. For starters, include cars that will give you more than 50% chance of getting your first earning. Your type of cars should also coincide with your type of business. For example, if you’re a car rental for businessmen, you’ll want to choose sedans like Audis and Mercedes-Benz.
3. Starting a business, you also have to feature a good maintenance and customer service. You want your customers to be happy so they’ll avail of your cars again and not drive them away. You also have to make sure that your cars are all insured before letting them be used by your customers.

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What are the taxes involved in a car hire business?

There are several taxes involved when you invest in a car rental business, whatever country you are in. If you are in UK, you can always get a professional help from HMRC (check out this page to find HMRC contact number). There is a way to deduct these rental car expenses that will lighten your tax burden. One way is by filing for an itemized deduction, which is only eligible for car rental purposes of business, medical, moving or relocating and charity.

Keeping Your Business Deductions

The HMRC requires that you document your business income and expenses in a professional uniform way. They say you can’t run a business without keeping records and many times will disallow deductions you try to take if you don’t have the proper documentation.

Here are the most important systems you need to have in place in order to keep all of your business deductions:

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BANK ACCOUNT:

You must set up a separate bank account for your business. The HMRC will definately disallow all of your business tax deductions if you are co-mingling funds, operating your business out of your personal bank account. If you co-mingle funds, the HMRC will assume all of your expenses are personal and removed from your tax return. This will leave all of your income on the return for you to pay taxes on.

SAVE RECEIPTS:

Please save all receipts for your business purchases. The best method is to make a copy of them or scan them into your computer and save them on your hard drive, a flash drive and on a disc. If you don’t reproduce the receipts, you will find that after the three years, the HMRC normally waits to audit you, all your information has faded off the page.

DO NOT PAY CASH:

Since cash does not leave a paper trail, paying for business expenses with it leaves your fate up to the HMRC. If you do not have proof of payment, the HMRC will use it’s discretion in deciding whether or not to accept the deduction. Most likely, they will not allow it.

KEEP ALL CREDIT CARD AND BANK STATEMENTS:

In order to have a complete record of your fiscal year, you should save all of your bank and credit card statements. These statements should be scanned and stored on your hard drive, flash drive and disc.

KEEP A MILEAGE LOG:

If you intend to take a deduction for driving your car, it is necessary that you keep a log of all the mileage you drive. Information contained in your log should be the date, destination, roundtrip mileage, business destination, who you met with (if anyone).

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USE A BOOKKEEPING SYSTEM:

You are required by the HMRC to have a bookkeeping system that summarizes the business’ financial transactions for the year that are reported on your tax return. The absolute best solution to this problem is to hire a professional accountant to keep track of this information. An accountant will provide you with accurate reports and graphs that help you make better informed decisions about your business.

IRS Tax Help

Contrary to popular belief, the HMRC is really one of your best friends. At first blush I know this sounds a little crazy, but check out their mission statement: “To provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying integrity and fairness to all.”
The HMRC Does NOT Make Any Of The Tax Laws!

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Congress in fact makes the tax laws. The HMRC simply acts as an educational, monitoring and enforcement agency operating under Congressional direction. Congress has recently reacted extremely positive to the shifting paradigm in the American workforce toward self employed individuals and home based businesses. They have created numerous new laws that give us tremendous legal tax deductions, incentives and benefits in operating a home business. But remember, “you must apply the knowledge to get the maximum benefits.”
Reducing your taxes is a lot like losing weight. The experts can tell you how, and they can give you tips and suggestions that have proven successful for others, but you have to be the one who is actively and personally involved.
Legally reducing your tax bill and increasing your cash flow is something you have to do for yourself. If your looking for HMRC tax help you must find and implement a tax strategy that is compliant with current tax laws. Why spend hours researching these new tax laws when you can benefit from our small business tax guide? There’s nothing wrong with having a coach to help with tax planning. Far too many taxpayers expect their tax return preparer to figure out a method for legally reducing their income taxes for them. Most tax return preparers do not have the time to review 60,000 pages of complicated tax code to find the “hidden nuggets” buried in the new home based business code.

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Let Me Help You Lose Your Extra “Tax Burden Weight” and Replace It With Legal and Ethical Cash Flow From Your Home Based Business

As a Wealth Preservation attorney for over 30 years, I know how difficult it is for the average person to read, study, interpret and implement positive changes in the over 60,000 pages of tax laws. I personally spend hundreds of hours every year researching all of the new tax laws and then designing the proper implementation strategies to easily, ethically and properly implement them to benefit my clients. Now, I’ve taken all of that research that has proven to be extremely profitable for the people who implement it and created the One Minute Tax Coach.