Being registered for VAT is optional if you earn less than £85,000 per annum. However, because of the expenses subcontractors tend to have in the courier industry, it is usually beneficial to do so. The Flat Rate VAT Scheme (otherwise known as FRS) is a government scheme that was introduced in order to simplify and lessen the workload of being VAT registered. FRS means you can charge VAT at the standard 20%, but rather than claim back the VAT you have spent on things like fuel and vans, you simply pass over an agreed amount and keep the rest.
In the courier industry, the set percentage that has to be passed back to HMRC is 10% of the gross invoice. So e.g. if you are invoiced for £600 plus £120 VAT, then you would pass £72 to HMRC and can keep the remaining £48 from the VAT.
All information you will need from the driver can be found on the driver’s profile page.
VAT is usually accrued for the driver so that they can use this additional income to go towards their end of the year tax bill. If the driver wanted to receive monies held prior to this, they can contact a member of the Securitax Customer Services team on 01277 424423 and their pot will be calculated for them with the option to draw the funds down.