private hire operator's licence - individual or partnership?

[J_M]

Hi,
I've used your service before and was very satisfied with your prompt and professional help. I hope you could also advise me on the following question related to private hire operator's licence from the accounting point of view.

The Public Carriage Office allows three options when applying for an operator's licence (whether small or normal), i.e.: a) individual; b) as a registered company or partnership or c) as an unregistered company or partnership.

The option I would like to go for is the unregistered company or partnership, as I want to apply with another person and operate under a single small operator licence which allows up to two cars per licence. This would mean we could split the cost of the licence. However, despite sharing the licence we would like to keep our accountancy separate, as individuals, not as a partnership. We are both already registered at HMRC as sole traders, and we would not like to change it if possible. Besides, even when holding one licence for two cars, we would still have individual running costs and separate profits, as such is the nature of the business. Also we have decided to work from home(s), so there would be no office costs to share.

I phoned the PCO and asked whether opting for the unregistered company or partnership type of the licence would mean we would have to declare the partnership to HMRC, but they were not too sure and advised to apply for two individual licences, just in case. This obviously brings more money into their pocket, and we think it unnecessary as a small licence allows for up to two cars.

The question is if it is possible from HMRC and accountancy point of view to hold one licence (the unregistered company or partnership option), but keep the accountancy separate, as two separate sole traders, not a partnership?

Any help or advice would be much appreciated. Thank you in advance.

J_M

[J_M]

Is there really nobody competent enough to advise me?

Originally Posted by J_M

Hi,
I've used your service before and was very satisfied with your prompt and professional help. I hope you could also advise me on the following question related to private hire operator's licence from the accounting point of view.

The Public Carriage Office allows three options when applying for an operator's licence (whether small or normal), i.e.: a) individual; b) as a registered company or partnership or c) as an unregistered company or partnership.

The option I would like to go for is the unregistered company or partnership, as I want to apply with another person and operate under a single small operator licence which allows up to two cars per licence. This would mean we could split the cost of the licence. However, despite sharing the licence we would like to keep our accountancy separate, as individuals, not as a partnership. We are both already registered at HMRC as sole traders, and we would not like to change it if possible. Besides, even when holding one licence for two cars, we would still have individual running costs and separate profits, as such is the nature of the business. Also we have decided to work from home(s), so there would be no office costs to share.

I phoned the PCO and asked whether opting for the unregistered company or partnership type of the licence would mean we would have to declare the partnership to HMRC, but they were not too sure and advised to apply for two individual licences, just in case. This obviously brings more money into their pocket, and we think it unnecessary as a small licence allows for up to two cars.

The question is if it is possible from HMRC and accountancy point of view to hold one licence (the unregistered company or partnership option), but keep the accountancy separate, as two separate sole traders, not a partnership?

Any help or advice would be much appreciated. Thank you in advance.

J_M

[Lord Hutton]

I think you might wish to actually contact HMRC with this accounting question. From the actual operational side, looking very quickly at the TfL site, there appears to be an issue related to premises inspection as part of the licence approval. So, although you would assume to be a "partnership" for the licence, you effectively would operate as sole traders from two different premises, which might be the thing that determines which licence you should actually apply for in the eyes of the PCO. I would assume that the PCO would only licence a partnership if it was operating from a single premises, otherwise there would be nothing to stop all operators forming "partnerships" to reduce their licence costs in the way you describe.