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Do you need to register for VAT?

Starting out as a courier comes with many responsibilities, and one of the most important ones is understanding taxes, especially your VAT (Value Added Tax). 

It can be a bit daunting at first, but getting a good grip on VAT is important for running your business smoothly and keeping costs in check. 

In this guide, we’ll explain what VAT is, when you should register for it, and how the VAT returns process works for couriers.

What is VAT?

VAT, or Value Added Tax, is a tax applied to most goods and services in the UK, from soft drinks to your home electric bill, and is typically set at 20%.

It’s an indirect tax, meaning it’s collected by businesses on behalf of the government. 

How it applies to couriers

As a courier, you’ll likely pay VAT on several essential business expenses. 

This could include fuel, vehicle maintenance, PPE, freight exchange memberships, and even office supplies if you have a home office. 

If you’re registered with HMRC, you can claim back the tax you’ve paid on these items, reducing your overall expenses.

When should you register for VAT?

If you earn over £90,000 in a 12-month period, you’re legally required to register for Value-Added Tax. 

But even if you’re just starting out and your earnings are below the threshold, it might still make sense to register for it. 

If you regularly pay VAT on business expenses, such as fuel or equipment, registering could allow you to reclaim the tax, potentially saving you money. 

Additionally, being VAT-registered can give your business a more professional image, which might be beneficial when dealing with larger shippers who expect to work with VAT-registered companies.

On the other hand, registering for it could complicate things if your business turnover is low. 

You’ll have to add tax when you price your courier jobs, which could make your prices less competitive, especially if your customers are individuals or small businesses that can’t reclaim the tax themselves. 

For smaller courier businesses, this extra burden might outweigh the benefits of reclaiming taxes on expenses.

How to register for VAT as a courier

Registering for VAT is a straightforward process and can be done online. 

  1. Gather your details: You’ll need your National Insurance number, business information (name, address, start date), bank account details, expected turnover, and information about any businesses you’ve owned recently.
  2. Register online: Visit the HMRC website, sign in or create a Government Gateway account, and fill in your business details. Submit your application.
  3. Choose your VAT scheme: Most courier owner-drivers will use the standard VAT scheme. However, the Flat Rate Scheme might be simpler if your turnover is under £150,000.
  4. Receive your VAT certificate: HMRC will send you a VAT registration certificate with your tax number, the date to start charging your customers, and your first return deadline.
  5. Start keeping records: From the registration date, keep detailed records of Value-Added Tax on your sales and expenses. These will be essential for your returns.

How to claim your VAT back

Once you’re VAT-registered, you’ll need to submit regular returns to HMRC, usually every three months. 

This process might sound complicated, but with a bit of organisation, it’s quite manageable.

To complete your return, you’ll need to keep detailed records of all your sales and expenses. 

You’ll calculate how much tax you owe on your sales and subtract any Value-Added Tax you can reclaim on your expenses. The difference is what you’ll pay to HMRC. 

If the amount of tax you’ve paid on expenses is more than what you owe on sales, you can claim a refund.

Common VAT claims for couriers

As a courier, you’ll have several regular expenses that are subject to Value-Added Tax and can be reclaimed. 

Fuel is one of the biggest expenses you’ll face, and claiming back the VAT on this can significantly reduce your costs. But fuel isn’t the only expense you can claim tax on—there are several others that can help you save money. 

Here’s a list of common expenses that couriers can claim VAT back on:

Unfortunately, you can’t claim on your vehicle insurance or courier insurance, as they’re exempt from VAT.

Consider using an accountant

While you can handle your tax returns on your own, many couriers find it helpful to use an accountant. 

They’ll take care of the paperwork and help you avoid common mistakes that could lead to penalties. They can also give you advice on what you can and can’t claim, which can be a real help in making sure you’re getting all the Value-Added Tax back that you’re entitled to.

Example of courier VAT returns

To give you a clearer picture, let’s say you spent £15,000 on fuel, £5,000 on vehicle maintenance, and £2,000 on other supplies in the past year. 

With VAT at 20%, that means you’ve paid £4,400 in VAT on these expenses alone.

If you’re registered, you can claim back that £4,400, reducing your overall business costs significantly. 

On the other hand, if you weren’t VAT-registered you’d have to absorb these costs, which would eat into your profits. In this case, being registered could save you a considerable amount each year.

Look at it this way: by claiming your VAT back, you’ll earn 20% more per year!

Conclusion

While registering for Value-Added Tax is required by law if your turnover is over the £90,000 threshold, it can be worth it for newer businesses once you’ve started taking on regular courier jobs. 

By reclaiming the tax on your expenses, you can lower your operating costs and potentially improve your bottom line. However, if your business is smaller, the extra admin might not be worth the hassle.

Whether you choose to register for VAT or not, staying on top of your finances is key to building a successful courier business. If you’re unsure about the process, speaking to an accountant can help you make the best decision for your situation.

As a courier, it’s important to stand out from the competition. By offering specialist courier services, you prove you can handle a variety of different types of cargo, and makes you the ideal choice for clients with specific requirements.

In this guide, we’ll explain the 17 specialist courier services and licenses you can add to your Courier Exchange profile and offer to your customers.

The most popular specialist courier services

1. 2 Man: This service means you have two people available for deliveries. It’s ideal for handling items like furniture or large appliances that require extra manpower for safe transport and installation.

2. 24 Hour: This means you can handle urgent deliveries or those needed outside standard business hours, such as emergency parts or last-minute gifts.

3. ADR: This stands for ‘Agreement concerning the International Carriage of Dangerous Goods by Road’. As an ADR courier, you can transport hazardous materials, including chemicals or flammable substances, safely and legally.

4. DGSA Qualified: As a ‘Dangerous Goods Safety Advisor’, you can oversee the transport of hazardous goods, ensuring all safety and legal guidelines are followed. It’s very similar to an ADR licence.

5. FORS Bronze, Silver, Gold: The Fleet Operator Recognition Scheme recognises different levels of excellence in fleet operations. Bronze focuses on legal compliance, Silver on maintaining safety equipment, and Gold on effectively managing noise pollution and emissions. This is a sign of high operational standards.

6. Frozen: Specialising in frozen transport is another popular courier service, and ensures that items like ice cream or biological samples are kept at the correct temperatures throughout transit.

7. GOH – Garments On Hanger: This service is tailored for the fashion industry, transporting clothing items that need to arrive wrinkle-free and ready to wear or sell, such as dresses or suits.

8. High Security: High-security transport is used for high-value or theft-prone items like jewellery, electronics, or confidential documents, involving enhanced security protocols to prevent loss.

9. Installation & Swap-out: This service includes the installation and, if necessary, the swapping out of old items. It’s often used for appliances like refrigerators or office equipment.

10. Level A / B Aviation, Cargo Operative (previously Level D): These aviation security certifications indicate that you can safely and securely deliver road cargo to and from airports and air freight facilities. This is important for goods needing to be flown, like pharmaceuticals or electronics, or in some cases, urgent parts that are needed to fix a grounded aircraft waiting to fly.

11. Refrigerated / Chilled: Similar to frozen services but at chill temperatures, this service is necessary for dairy products, fresh flowers, or pharmaceuticals that must stay cool but not frozen.

12. Removals: Handling complete removal services means managing the transport of household or office contents from one location to another, involving everything from furniture to personal belongings.

13. Waste Carrier: As a licensed waste carrier, you can legally transport waste materials, including construction debris or old electronics, ensuring they are disposed of or recycled according to environmental regulations.

14. WEEE: Specialising in the disposal of Waste Electrical and Electronic Equipment means you can handle items like old computers, televisions, and refrigerators, ensuring they are recycled or disposed of in an environmentally safe manner.

15. Authorised Economic Operator (AEO): This status shows that your role in the international supply chain is secure and that your customs controls and procedures are efficient and compliant. This is important for companies that regularly import or export goods.

16. CMR: The CMR insurance certification means that you’re qualified to carry goods internationally under the CMR consignment note, offering legal protection and security for items being transported across borders, such as furniture, electronics, or commercial goods.

More services, more work

Adding these specialist courier services means you can take on different types of jobs, including ones that pay better.

This makes your profile more attractive on CX, helping you get more work. Over 13,000 courier jobs are posted on CX every day.

Offering specialist delivery services lets you make the most of these opportunities, filling your van and boosting your earnings on Courier Exchange.

Grow your business with Courier Exchange

Get access to 13,000+ loads a day, build your client list, and manage your finances.

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As an owner driver, jobs are easy to pick up wherever you happen to be in the country with the Courier Exchange app. If you happen to take on a load in London when you’re not a native to the Capital, the idea of finding your way around its notoriously fiendish road network can be intimidating to say the least.

But don’t let it dissuade you from accepting the work. Follow these simple steps before negotiating the delivery schedule for your London load.

1. Do Your Research

London is a vibrant capital city where no two days are the same. One very handy piece of advice for couriers is to check online for any possible disruptions before you start planning your journey. It’s entirely possible that your route could be affected by one of the following:

It would be foolish, for example, to agree to a quick delivery in West London on the weekend of the Notting Hill Carnival. Of course there will always be the chance of last-minute traffic problems or road closures, but it is worth checking online beforehand to save time (and patience) later.

2. Give a Generous Time Estimate

As an owner driver, don’t be tempted to accept multiple cross-London deliveries in a single day. Courier jobs may come in thick and fast, but customer satisfaction and a delivery schedule you can stick to are more important than completing multiple jobs quickly.

You can be sure that the traffic in the Capital will move at an agonisingly slow pace, no matter the hour of your delivery. It’s easy to get frustrated when you’re sat at a standstill in a queue, but don’t add to the pressure by giving yourself a schedule you can’t hope to meet.

3. Map Out Your Route Ahead of Time

It may sound obvious, but a wing and a prayer just don’t cut it when it comes to navigating London. We would always recommend checking your route options on both a conventional map and a Sat Nav before you set out on your journey. That way you can gain an understanding of the lay of the land and identify two or three routes that would get you to your destination, before picking the most sensible one.

4. Stick to Your Plans When Navigating London

Once you have chosen your route, take the advice of the London Hackney Club (otherwise known as black cabbies, to you and me): even if you have years of navigation under your belt and know the streets of London like the back of your hand, a lot of the time traffic jams can’t be avoided.

Try not to stray from your chosen route – attempting to “get around the traffic” will only lead to frustration and potentially add precious minutes to your delivery time.

5. Two Pairs of Eyes are Better Than One

It can really help to have a second pair of eyes in the cab with you when you’re driving in an inner city with multiple lanes and exits.

We’ve all been in that situation when your Sat Nav gives you an unclear instruction and you’re craning around to find the correct turning. A mate on the seat beside you can keep a look out for road signs and man the phone while you’re navigating London, allowing you to focus all of your efforts on the road. Of course, a second pair of hands also comes in useful when it’s time to unload at your destination.

Follow these simple steps, keep a cool head and you’ll be planning your London routes like a true Londoner in no time!

If you’re not based in London, check out our guide to the best locations for couriers.

Grow your business with Courier Exchange

Get access to 13,000+ loads a day, build your client list, and manage your finances.

Sign up

In the world of shipping and logistics, smooth operations and secure deliveries are essential for success.

If you’re a UK courier and want to start taking loads to and from the EU and beyond, CMR insurance is key to safeguarding loads during transit, offering peace of mind and financial protection for both you and your customers.

In this guide, we’ll explain what CMR insurance is, its significance for UK couriers, how it’s different to Goods in Transit insurance, and how it’s usually priced.

So what is CMR insurance?

CMR, or International Carriage of Goods by Road insurance, is a type of coverage specifically designed to protect goods being transported across international borders by road.

It’s named after the CMR Convention, an international agreement that outlines the rights and responsibilities of parties involved in road transportation.

This insurance is essential to ensure that goods are covered against damage, loss, or theft during their journey, providing financial support when unfortunate incidents occur.

Why UK drivers need it

Thanks to Brexit, couriers and hauliers face new challenges when operating across borders. CMR insurance becomes a crucial tool to navigate these challenges smoothly.

When transporting goods to EU countries and beyond, having proper insurance coverage ensures compliance with international regulations and mitigates potential risks associated with the road transportation process.

Having CMR coverage also gives potential customers and shippers piece-of-mind when they’re looking for specialist courier services.

CMR vs. Goods in Transit insurance

While both CMR insurance and Goods in Transit insurance focus on protecting goods during transportation, they have distinct differences.

CMR insurance specifically covers international road transportation under the CMR Convention.

On the other hand, Goods in Transit insurance provides coverage for goods transported within a country’s borders, covering various modes of transportation such as road, rail, and air.

Therefore, CMR insurance is a subset of Goods in Transit insurance, tailored for international journeys by road.

How premiums are calculated

Several factors contribute to the calculation of CMR premiums:

  1. Types of Goods: The nature of the goods being transported influences the risk associated with the journey. Fragile or high-value items might incur higher premiums due to their susceptibility to damage or theft.
  2. Distance and Destination: The length of the journey and the destination country affect the insurance cost. Longer distances and countries with different risk profiles can impact the premium.
  3. Security Measures: The level of security measures in place, such as tracking systems, alarms, and secure packaging, can impact the insurance cost. Enhanced security measures often lead to reduced premiums.
  4. Transportation Equipment: The condition and quality of the vehicles used for transportation play a role in determining the insurance premium. Well-maintained vehicles with proper safety features might lead to lower premiums.
  5. Claims History: The claims history of the courier or haulier can influence the premium. A history of frequent claims might lead to higher premiums, while a clean record could result in lower costs.

How to get CMR insurance

For the best-in-class CMR and Goods-in-Transit insurance, look no further than our trusted partners, Business Choice Direct.

They specialise in tailoring coverage to suit your unique needs, ensuring you have the right protection when it matters most.

Grow your business with Courier Exchange

Get access to 13,000+ loads a day, build your client list, and manage your finances.

Sign up

We’re thrilled to announce the launch of our much-anticipated Referral Programme, designed exclusively for all you hardworking and dedicated Exchange members.

Here’s the deal: every time you refer a brand-new member to the Courier Exchange or Haulage Exchange, we’ll give you a £50 Amazon gift card!

It’s our way of saying thank you for being an integral part of our community and spreading the word about our platform.

Here at the Exchange, we believe in the power of connection and collaboration.

You’ve experienced first-hand how our platform can revolutionise your business, streamline operations, and make the load quoting and posting smoother than ever.

Now, with the Referral Programme in place, you have a golden opportunity to share these benefits with your friends and colleagues in the industry.

How it works

First, you’ll need to join the Referral Programme!

Click this link to create your referral account, and you’ll see something similar to the screenshot below.

Once you’ve registered, you’ll be given a unique referral link that you can share with your friends and colleagues, across social media, your email signatures, your website and anywhere else you think will work.

Every time someone uses your referral link to join the Exchange as a brand-new paying member, you’ll get an email like the one below within 7 days to redeem your gift card.

Please note that if the person you refer is already a ‘lead’ in our system (i.e., we’ve contacted them before), it won’t count as a successful referral. Please see the terms & conditions for more on this.

When you click the Redeem £50 button, you’ll be given your Amazon gift card code.

Copy that, then head over to https://www.amazon.co.uk/gc/redeem.

Once there, add your code to the text box, click Apply to your balance, and you’re done!

So, not only will you be helping your fellow drivers and load posters grow their business and earn more, but you’ll also receive a little treat for yourself. It’s a win-win situation!

Whether you’re a seasoned member or you’ve recently joined the Exchange, we encourage everyone to participate in this programme.

We know that referrals come from a place of trust and satisfaction, so we’re confident that your recommendations will make a difference.

Terms & Conditions

Below is a summary of what you’ll need to know as a referral programme member.

Click here for a full list of terms & conditions.

As a courier, life on the road can be a slog. You’ve got delivery deadlines to hit, customers to keep happy, and invoices to keep track of. With all of this, it can be easy to forget about one essential thing: your health!

Staying physically and mentally healthy is really important, so we’ve put together some simple yet practical tips to keep you fighting fit.

Physical health: Keeping the motor running

Food and drink

Grabbing a quick pasty from the petrol station is easy. We get it, they’re tasty and convenient, but it’s important to remember that our bodies need proper fuel to function at their best.

Next time you buy lunch, try to get a mix of lean proteins and veggies, and avoid carb-heavy food like sandwiches and pastries. You’ll have more energy throughout the day, and it’s better for you long-term! If you’re a snacker, skip the Haribo and grab some fresh fruit or healthy snacks like roasted chickpeas or dark chocolate.

And don’t forget about hydration. Keep a reusable water bottle on hand and refill it regularly to stay alert and keep fatigue at bay. A lot of motorway services have free water refill stations these days, and a few petrol stations have them as well. You can even get water bottles with straws, so you can drink (water) while driving.

Staying active

Exercise is vital for your physical health. But when your “office” is a driver’s seat, finding time for a workout can be challenging.

The key here is creativity. Can you fit in a quick walk while waiting in a loading bay? How about some stretches during a petrol stop?

Here’s a quick 5-minute stretch routine you can use to stay limber and refreshed. No yoga mats or Lycra leggings necessary!

1. Neck stretch (1 minute):

2. Shoulder rolls (1 minute):

3. Upper body twist (1 minute):

4. Hip stretch (1 minute):

5. Seated hamstring stretch (1 minute):

These quick and easy stretches can help you alleviate stiffness, improve flexibility, and boost circulation, even within the confines of your van, or when you’re waiting in a loading bay.

Remember, it’s always important to ‘listen’ to your body – if you feel any pain or discomfort when you’re stretching, try a different stretch or take it easy. If it persists, book an appointment with your GP!

Routine health checkups

Speaking of GPs, it’s easy to forget routine health check-ups. Regular visits to your GP are crucial to catch potential issues early. Plus, they can provide personalised advice based on your individual needs.

If you’re struggling to get an appointment at your local surgery, some high-street pharmacies can give health advice and consultations.

Rest and sleep

Never underestimate the power of a good night’s sleep. Getting proper rest is as important as eating healthily and exercising.

Aim for 7-9 hours of sleep each night and maintain a regular sleep schedule. This can be tricky with late-night or early-morning jobs, but even a quick power nap at a motorway services can make a world of difference.

If you’re fortunate enough to have a sleeper cabin in your vehicle, invest in some decent earplugs and bedding, so you’re as undisturbed and comfortable as possible.

Mental health: Keeping the wheels turning

Managing stress

Let’s face it, courier work can be stressful. Traffic jams, tight deadlines, difficult clients, the list goes on. That’s why finding ways to let off steam and relax is important. Deep breathing exercises, mindfulness, or simply enjoying your favourite tunes on the radio can all help reduce stress levels.

Staying social

On the road, it’s easy to feel isolated. Make an effort to keep in touch with family and friends regularly. A quick chat during breaks can boost your mood.

Also, don’t overlook the importance of building relationships with your clients and fellow drivers. A friendly conversation can brighten your day and make the job more enjoyable!

Mental stimulation

Long hours on the road can be a drag. Keep your mind sharp and avoid boredom by listening to podcasts and audiobooks, or even learning a new language.

We highly recommend Pete the Courier’s Sunday Q&A series, which is available on all major podcast platforms including Spotify and Apple Podcasts.

So long as it doesn’t distract you from driving, it’s a plus!

Wrapping up

In conclusion, staying healthy on the road is about balancing your physical needs with your mental well-being.

Eat well, stay active, get plenty of rest, manage your stress, keep in touch with loved ones, stimulate your mind, and don’t forget those routine health check-ups.

Remember, a healthier you makes for a happier, more efficient courier. And that’s a win-win situation for everyone!

Grow your business with Courier Exchange

Get access to 13,000+ loads a day, build your client list, and manage your finances.

Sign up