I had an email from HMRC this morning, which you can view here in website form.
If you go to GOV.UK and search for ‘Self-Employment Income Support Scheme’ you will find the tool that checks your eligibility, and assigns you a time from which you can place your claim. I strongly advise that you do it this way, just in case someone sends you a scam email – never click on links from emails to access your bank or business accounts anywhere.
Make sure you have the necessary information before you start your eligibility check. You need your Government Gateway number, your UTR, and your NI Number to complete it.
The good news for me is that I am eligible, and I can make a claim from next week (though there is the possibility that the claim system might not be available until later in the week, but we shall see). The email also says that the calculated money will be paid within six working days.
Update: Well, it didn’t take long, did it? The system is about as simple and straightforward as it could be, yet it still seems to have thrown many into a state of utter confusion.
The original email makes it clear that you need your Gateway Access number, your UTR, and your NI Number. If you don’t have those to hand, you will not be able to complete the check. If you do your own self-assessment you will have them (frankly, even if you don’t do your own SA, you really ought to have this information on file).
When you check your eligibility, it just says whether you are, or whether you aren’t, eligible. It doesn’t tell you how much you’ll be getting or give you any money there and then. Honestly, it doesn’t. It then asks you to enter your contact details. Just your email address and phone number – no inside leg measurements, bank details, or anything – just your email address and contact phone number. This is so you can be sent the claim link on the date and time it gives you on the screen.
Claim dates and times are different for everyone. I guess they’ve done it like this to stop everyone crashing the system as they all apply at the same time first thing Monday when it starts up. In other words, the claims are staggered whether you like it or not. Moan about it all you want – you’d certainly be moaning if the system crashed due to overload – but at least they are trying to avoid problems.
Let me stress again. You are not making a claim at this moment in time. You are just checking your eligibility, and providing two pieces of contact information so they can send you the claim link at your date and time next week.
Once you have done that, the screen message clearly indicates that there’s nothing more to do at this stage. The clue is in the absence of any further questions or requests for (sigh) bank details. They will want your bank information next week.
This system makes perfect sense to me. However, some people also appear put out by the fact that they aren’t just getting a wheelbarrow full of cash dumped on their doorstep, and they’ve actually got to do something to get it. Something so horrendously illogical as… filling in a claim form!
Reading social media, etc., and it amazes me the number of instructors who are confused over what they need to do – even though they apparently do their own self assessments each year!
If you do your own SA, you will have access to the Government Gateway. When you log in, the security system sends you a text message with a short-lived access code, which you then have to type in before getting to your account. It stands to reason you should not be sending screenshots of this access code to social media or any other source, but I can see people doing precisely that. The first time you log into the Gateway, it asks you to set this up.
The access code expires after 15 minutes, after which time you’ll need to get a new one. However, you can ask the system to ‘remember for 7 days’ if you plan on logging in several times in the immediate future. This is even more reason not to go posting screenshots anywhere just because ‘you can’. It is security information, roughly equivalent to a password, and making it known to all and sundry removes one level of security from your most private financial information. If anyone gains access to that, they could pretend to be you virtually anywhere in the world.
I also see people triggering the whole issue all over again every single time they get a text message, with a deluge of inconsistent, repetitive replies every single time. HMRC will not send out any messages with links in them. You should always go to GOV.UK and access your account from there, or from within links within GOV.UK.
If you’ve gone through everything once and been given a time and date for your claim, you do not need to do it again. You do not need to do it two more times. Or three more times. Once you’ve done it the first time, nothing you can do will make next week come any quicker. Just wait.
Not every test message you receive is a scam. If you get one from HMRC and it doesn’t contain any links or mention sums of money, it is almost certainly legitimate. Log into the Gateway and you can check – if you don’t owe anything when you look at your account, then you don’t owe anything, period. So any text message saying otherwise can be ignored.
This is the same principle you should follow for any other text message telling you your ‘bill is overdue and you’ll get cut off if you don’t pay immediately’. I get them allegedly from EE and Virgin Media on a regular basis. The giveaway is usually the email address they come from, but all I do is log into my EE or Virgin accounts and check (helped by the fact that I pay by direct debit and I know I have funds to cover my payments). What I don’t do is click the link and then start posting all over social media to get a 50:50 opinion on whether it’s a scam or not. I note that social media replies are frequently 50:50 on being right if it is a scam, and 50:50 on being right if it isn’t. The net result is a complicated answer that is lucky if it’s even close to being right.
DO NOT click links in emails to access your bank, HMRC, or other accounts where your bank details are stored. If you do, contact your bank immediately and tell them what you’ve done.
Even if you realise it is a scam, don’t try and be a smart arse by clicking the link to try and outfox the scammers. You might be saying ‘yes’ to having software installed on your PC or phone. At the very least, you are saying ‘I am here’, and thus registering yourself as a target.
Originally published 27 March 2020.
It’s no secret, but I am not a fan of this government in normal times. None of that will have changed.
However, they have announced a help package for self-employed people that will apply to the majority of driving instructors. From what I understand at the moment, your average income for the last three years will be determined (though I believe you will still be eligible if you submitted a return for last year), and you will be paid 80% of that. It’s all explained here. You will still be liable for tax on it next year because it is still self-employed income, which is perfectly understandable. But this is where the fun begins.
It appears that many instructors still can’t work out the difference between turnover and profit/income, and are of a mind to believe that the government is going to (or should be) be paying them for overheads which they no longer have to cover right now, such as fuel and franchise/car ownership costs. Others, for unfathomable reasons, seem to expect to be paid their entire (and sometimes imaginary) income without even having to get up. This is where previous, erm, ‘creativity’ when filing your tax return comes home to roost, and if you’ve been earning close to £30k but only declaring £20k of it, then it is the latter figure you’ll be assessed on.
For the billionth time, your turnover is not called gross profit – or any other term with ‘profit’ in it. It is your turnover. HMRC will not be calculating this grant based on your turnover, and that is true no matter what stupid name you give it when you’re doing your tax return. It is how much money passes through your hands as a result of your business. In any normal year, you have to subtract business overheads from your turnover. What’s left is your trading or taxable profit. This is sometimes referred to as gross profit, and it is what you pay tax on. It is the trading/taxable profit HMRC will be using to calculate how much you’ll get from this grant – not any other kind of ‘profit’, and especially not one you made up so you could use the word ‘net’ a lot on your Excel spreadsheet. And one final thing, as long as your trading profit makes up more than half of your total income then you will still get the grant – that condition is there for people who live off investments. In other words, if you have a private pension income and also work as an instructor, then as long as your Self Assessment trading profit is more than you get from your pension (which is PAYE and HMRC knows about it already), you are still eligible.
I have to admit that GOV.UK has complicated the issue by putting ‘turnover’ in brackets next to ‘total trading income’ (aka trading profit) on it’s ‘information page’ – which doesn’t actually explain things very clearly at all. The media summaries which say you will get “80% of your taxable profits from self-employment, averaged over the last three years” is the key.
If you go on to the HMRC website and look at your account, you can see your tax statements for the last four years. Last year – the one I’ve most recently sent in as my self-assessment – my total income was around £25,000. Part of that for me is now from a private pension which I only started receiving part way through that tax year, but which means I’ve eased off the gas somewhat when it comes to worrying about cancellations and maintaining a full diary these days. The majority of it was from self-employment, though. Depending on how they do this, I estimate that they will be paying me around £1,000 per month.
That’s £1,000 a month (£230 a week) that I otherwise wouldn’t have had, which – when the payment kicks in – will be backdated to the start of March, as I understand it. As the saying goes, that is somewhat better than a poke in the eye with a sharp stick.
These are extraordinary times, and we are experiencing something no one has ever experienced before – and I include the Spanish Flu epidemic in 1918 in that (if anyone is alive who can remember it). The government paying anything – let alone 80% of income – to millions of people is unprecedented. Unprecedented with knobs on. Unprecedented to the power of ∞. And still people aren’t happy.
The vast majority of instructors have had franchises, car leases, car loans, and almost all other debts put on hold. Gas and electric companies are deferring payments. Even major lenders for mortgages are trying to help. OK, some are still stalling on it, but they’re going to have to get real and offer people something. On that alone, though, getting 80% of your normal annual income could easily leave you slightly better off in the short term until you can start earning again and the bills come back online.
In some cases, the help is automatic and is being applied as a matter of course. In others, you simply have to get off your arse and ask for it. Although they appear to snowed under, Universal Credit is open to almost everyone – especially those who have only been instructing for a short time.
I am fortunate now, and have my private pension to help me through this. That pension, with the lump sum that went with it, was originally purposed for use in retirement when I eventually get there, and it is a long way from keeping me in the manner to which I have become accustomed by itself (though it will be much closer once there is a state pension on top of it and I have no business overheads to worry about). But to have it partially protected in this way now is some comfort.
Of course, this will make many people angry – anger comes immediately after jealousy for many people. But I would point out that I have been through something very similar financially in the past. When I lost my job all those years ago, I had huge debts and zero income initially (the pension was way off). While I trained to be an ADI I was on almost the minimum wage for a part of the time, and had to negotiate with my creditors to allow reduced payments throughout that time – and that was back when they had no reason at all to want to play ball. But they did (though CapitalOne tried hard not to the entire time, with their incessant, sometimes daily, phone calls). I didn’t want to declare bankruptcy, or use it’s teenage cousin (the IVA), because of how it might affect me being an instructor and self-employed later on. My credit rating then was literally zero.
It was a struggle. But I got through it – forced my way through it, in fact – and eventually paid off all my debts. My credit rating now couldn’t be higher.
If I can do it, you can do it. You can. The only way out of situations like that – and like this one now – is to be active and proactive. To meet problems head-on and deal with them. And to accept that some degree of hardship is inevitable. Don’t get angry or start throwing hissy-fits at anyone, and be very careful if you cut off payments without clearing it with them first (don’t listen to smart arses on social media telling you to do it), because that would mean you’re defaulting on your agreement, and I can promise you that will come back to haunt you in future if you get one against your name. Yes, you might be on hold for a long time on the phone – other people are affected, too – and yes, you might get cut off. But you’re not going to get chucked out of your home anytime soon. There is a solution to every problem. You just have to find it.
I realise that the support package will not apply to those who have only been trading for a short time, and I am really sorry for you about that (obviously, the title of this article isn’t directed at you). Similarly, you’re not eligible if your main income is from somewhere else, and you only give lessons to make a bit of pocket money. Universal Credit is there if you need it, so push for it. And if it really seems like there is no way forward – or if you simply cannot do it by yourself – contact a credit management company to help you.
Once all this is over, people are going to want driving lessons again. Many will be in a position where they need to drive to be able to find work. While all this current stuff is happening, people will still be turning 17, and they will be waiting for the time when they can start taking lessons. In my case, all those people who I had to terminate lessons with last week will still be waiting (unless they were all so mercenary they managed to find some asshole who has been teaching during the pandemic).
We can all get through it.
Well, Donald Trump appears desperate to outdo himself with everything he says and does. You will no doubt have heard his latest medical endorsement of the possible use of bleach or detergent – injected or consumed – to get rid of COVID-19. He even iced the cake by referring to UV light – used internally as well as externally – as a possible ‘cure’ for the virus!
Whatever he meant – whatever he was thinking – it is what other people will think that matters. Stupid people, in particular.
There has already been a case of someone in Arizona dying because he took Trump’s previous endorsement of Chloroquine literally and dosed himself up on the stuff used to clean aquariums. His wife was apparently in a critical condition after doing the same. In the immediate aftermath of Trump’s latest rant, Reckitt Benckiser – the manufacturers of Lysol and Dettol – have had to issue warnings not to ingest or inject their products.
The problem is that stupid people don’t know that they’re stupid. In many cases, they actually think they’re smart. I suppose ‘stupid’ is perhaps a bit strong, but the alternative – that they are just average people – is potentially even more worrying, since it means that there’s a lot more of them around.
Sticking with the bleach thing for a moment, household products are not manufactured under conditions that make them anywhere near suitable for internal use. They are even further away from being suitable for intravenous use. An example would be calcium supplement tablets. The raw material in those is often calcium carbonate – but the quality of that material is nothing like the calcium carbonate that would be used in cement, which is another of its applications. The stuff in the tablets is purified in a lab to make it suitable for ingestion. The stuff used in cement pretty much comes straight out of a limestone quarry.
Household cleaners share a similar gulf in how ‘clean’ they are, with the additional problem being that you don’t use bleach – particularly chlorine-based bleaches – internally for anything. They are corrosive and toxic. Even gentler bleaches like the peroxides are used highly diluted and for external purposes (tooth whitening, for example).
But the problem seems to be that stupidity – or averageness – isn’t confined to Trump, the Americans, or any other nation, although there does seem to be a link between education and being prepared to do things that it might have been best not to.
Let’s summarise the problem we have. There’s a virus. It spreads easily. It kills a lot more people than seasonal flu does, even though it isn’t flu. There is no vaccine at the moment. No one alive can remember anything like what we have right now. In order to protect as many people as possible, the government ordered the lockdown we are all currently dealing with. No one person’s life is any more valuable than anyone else’s – no matter what their health or age.
Read that last paragraph carefully. It contains no opinion – just facts.
Now ask yourself this. What has changed in any of that during the last month? Absolutely nothing has.
And yet there is an article today indicating that, with the next pulse of warmer weather getting underway, people are breaking the lockdown rules in greater numbers than at any time since the lockdown began.
In my own industry, I continue to see people who are putting money and themselves above all else. They desperately want to return to work, and will try any argument to convince themselves they should be allowed to. There are still people saying that it’s ‘no worse than flu’. There are still people whose argument is ‘I need money, so we should be allowed back to work’. There are instructors desperately searching for key workers to teach, even though they have children and are in daily contact with vulnerable people. There are instructors desperate to return to work by the time ‘the kids go back to school’ (or conversely, want the lockdown lifted just to suit whatever the schools decide to do so that they can work without having to worry about childminding). There are older people arguing ‘I don’t want to be imprisoned for the rest of my life’, as if that is a reason for the lockdown to be lifted. There are people still desperately trying to believe that wearing a mask and gloves means you’ll be safe sitting in a car with six or more different pupils every day, and who would gladly go back to normal if that’s all they had to do. Some would work tomorrow – with no protection whatsoever – if they were ‘allowed to’. Others repeatedly quote ‘Sweden’, as if that somehow means we ought to pretend nothing has happened.
I could go on, and on, and on with more examples.
These are the ‘average’ members of society I was referring to. They simply do not have a clue.
People keep asking (or criticising) DVSA over concerns about their badges. The ADI’s ‘badge’ – often called the ‘green badge’ – is their licence to teach. It costs £300, which has to be paid every 4 years in order to remain on the Register. I had one such query this morning.
Understandably – up to a point, and usually until it becomes offensive, which with some ADIs it does after about two seconds – during the COVID-19 Pandemic people are asking if they will get an extension to their ADI registration.
The situation we are in is extraordinary. Nothing like it has ever happened before. And it is a Brand New Situation. It’s only been in progress for barely more than two months, and in that time extraordinary actions have been taken – such as the plan to pay people 80% of their income out of government coffers. I would also point out that the number of people who have died (and who are likely to die) is also rather extraordinary, but this seems to keep falling on deaf ears for many.
Right now, there is no clear light at the end of the tunnel, and no one can be certain about when this will all be over and we can return to work.
ADI registration is, I believe, a situation that is governed in Law. It isn’t something DVSA can just change whenever it feels like it, because it doesn’t have that power – only the Law does. Therefore, in order to extend registrations, the Law would need to be amended. Right now, there are far more important things we need to worry about.
Phoning up DVSA is not going to get you anywhere, except angry (if you’re one of the kind who refuses to understand the situation, and blames DVSA for everything). All they can possibly say is what I have said above: that registration lasts for a fixed four years and cannot be extended.
However, the longer this situation continues, the more of an issue it is likely to become. DVSA itself will almost certainly be thinking the same thing, even now. And from what I can see, they are already being lobbied by professional groups of angry people who blame DVSA for everything to look at extensions. If you are really concerned, maybe you could join one of these groups and add your voice.
So just bear that in mind. My own opinion is that if this does go beyond three months, an emergency amendment to the Law to extend ADI licences at some point is likely. Or a partial refund, maybe. Or a discount on the next renewal. I’m only guessing, and have no inside information. The only thing I am certain of is that whatever they do, someone somewhere will still be unhappy about it.
I’m just being realistic instead of angry.
But what about learners and their theory tests?
The same still applies. It’s the Law. Right now, DVSA can only tell you what the Law is, and they have no power to decide differently. And they don’t, no matter how angry you are.
I keep seeing people saying we’ll be back working as instructors by the end of May, or in June or July. I do not see how we possibly can be.
COVID-19 is still there. You can still catch it. You can still spread it. People can still die from it. And there’s still no vaccine to prevent it or ‘cure’ it.
None of that is likely to change by June.
Something new has got to come up before we could realistically start working again. If it turns out most of us have had it, and didn’t realise, but now have immunity, then that would be a game changer. But there’s no valid reason to pin our hopes on that right now.
Maybe a vaccine will be found much, much quicker than we think. But there’s no valid reason to pin our hopes on that, either.
Maybe COVID-19 will do as Donald Trump suggested barely a month ago, and just ‘go away’. And there’s no valid reason to expect that.
The simple fact is that if people start teaching again in June, the situation will be approximately the same (worse, actually, since there are more background infections) as it was a few days before the lockdown – an active virus, ready to jump between anyone who has it and anyone who doesn’t, and with the same potential outcome for anyone who develops symptoms that we have right now. If relaxing the restrictions too soon results in just one person being infected who otherwise wouldn’t be, it could easily result in dozens of others subsequently dying once they pass it on – and I’m thinking of examiners and test candidates.
Simply because DVSA is moving tests back to June and July is a meaningless detail when it comes to ‘getting back to normal’. It has no bearing on how the pandemic develops in any way whatsoever. The virus isn’t going to stop infecting and killing people just because a few thousand driving tests were cancelled in March and moved to July. There’s every possibility that when we get to July, they’ll be pushed back to September or October. Or even further.
Far too many people don’t appreciate how serious the problem is, and can only see it from the financial angle. And while that is most definitely understandable, it is not a sound reason to ‘get back to normal’ regardless.
But DVSA said tests were only cancelled for three months
Yes. And the day before that they were only cancelled for two days. And the day before that they weren’t cancelled at all.
Look, this is a developing situation – and an extremely serious one at that. When DVSA said ‘three months’, at that time it was a conveniently distant time point to push back to. Even two weeks in from the initial announcement, it should be absolutely clear to most people that three months is optimistic at best. Virus cases are still increasing, as are virus deaths.
It doesn’t matter how many people tell you they’ve had a cancelled test ‘rearranged to June’. Whether or not that test goes ahead in June is not governed by the fact it is currently on that date. It is governed by the pandemic and how it develops.
So why have I got a test date in June (or July)?
Absolutely no one knows what is going to happen next, and that includes DVSA. All they have done is move tests back according to government timelines – and that’s the timelines as they stood three weeks ago! You can see for yourself (or, I would certainly hope you can) how bad the situation with COVID-19 has become. Can you honestly see things changing in such a way that by June we’ll all be going about business as though nothing happened?
Open your eyes and look at what’s happening. Something totally unlooked for is going to have to happen for us to be ‘back to normal’ in June or July.
I need to get back to work
We all do. But the virus isn’t interested in that. It kills people. And that is far more important than the need to work.
Regarding the three-month driving test suspension, be aware that the rearranged dates in June cannot be changed right now.
One of my pupils texted me tonight and said the time on the new date she’s been given isn’t convenient, but she couldn’t change it. I asked her for the booking reference so I could have a look and even on the first page the message above makes it clear you cannot do anything right now. If you do try to proceed further, you get this message.
It’s fairly clear. The entire DVSA is effectively closed as far as test bookings etc. go.
I’ve now officially cancelled all my pupils’ lessons (with the exception of a Pass Plus that concludes Tuesday, and I’m uneasy even about that. Update: I have cancelled it).
Not one of them had any issues whatsoever, and all of them fully understood the gravity of the situation we find ourselves in right now. I’ve told them they can phone me or text me at any time, because I’m always here (unless COVID-19 gets me first), and that I will contact them as soon as I know we’re OK to fire up again.
I fully understand the financial predicament many other instructors are in. But there comes a time when you have to realise which side of the seesaw has the heavier load. There’s no point trying to bounce down when there’s a two-tonne bag of sand the opposite end. And that’s where we are. This is serious shit beyond anything we have experienced before.
It strikes me that many instructors are only thinking of themselves – and (perhaps understandably) using their children as scapegoats. But COVID-19 is a problem that is so serious that people have got to start actively looking at alternative ways of dealing with not being able to pay the mortgage or the bills instead of trying to carry on working against the tide. Seriously, that’s going to be a lot easier than you imagine once you start dealing with it – and far easier than what is likely to happen if you don’t, keep working, and end up in hospital.
Remember (or understand) that COVID-19 isn’t just something you get, then get rid of. Evidence suggests that those who recover often have impaired lung function, and possibly impaired organ function. Basically, they’re disabled and susceptible to minor ailments later. Not everyone – it’s too soon to know for sure – but enough to ring the alarm bells. By trying to ‘feed your kids’ against odds, you could easily end up in a far worse position on that front once the problem passes.
I find it ironic that even though the government response stiffens by the day, the ‘I’m going to work no matter what’ brigade maintains a flat response.
It’s still a relatively free country, and people still have a relatively free choice (for now). But I’d like to think people would make the right choice before it is made for them.
Oh, and the title of this article just refers to my lessons. The blog’s going nowhere – especially seeing as I will have a lot of time on my hands.
Update 23/03/2020: I hear that both BSM and The AA have directed their instructors to stop lessons immediately. They will not be charging franchise fees for four weeks, and will review that later as needs be – and depending on what, if anything, the government comes up with.
Houston, we have a problem!
I only wrote this a couple of days ago, but I’m having to update it already. The problem I was referring to was that not many driving instructors understand statistics or come from scientific backgrounds. They are concerned about Coronavirus on the one hand, but trying hard to persuade themselves they’re not on the other because there are obvious financial implications if they cannot work.
I noticed that there is a Coronavirus infographic doing the rounds. It’s from China, and it reports that 80.9% of cases are mild, 13.8% are severe, and 4.7% are critical. It also points out that ‘the majority of people’ recover. The latter two percentages require hospitalisation and intensive care, respectively. The originator of this infographic on Facebook – not the original Chinese source, I believe – who goes under the Facebook name of Information Is Beautiful, concludes “the majority of… infections are mild”.
Let’s put this into a more real-world perspective. I’ll start with the bottom line: if the entire population of a care home were infected, the ‘mild’ and ‘severe’/‘critical’ number would flip, and the vast majority of those infected would be at great risk. The same would perhaps be true if, say, a special school with a high population of Down Syndrome pupils were infected, since those with Down’s frequently have breathing issues in the first place. In a hospital, where people may already be ill, it would likely wreak havoc.
Information may well be ‘Beautiful’, but Understanding Information In Context is a hundred times better. And since the original version of this article less than a week ago, the situation has changed dramatically – as anyone with any sense at all would have known would happen.
I have elderly parents, both of whom have COPD. If they were to catch Coronavirus, they would probably die. I have a pupil who has a baby son with Down’s. If he caught it, it would be a serious issue for him and his son. I have another pupil whose partner is pregnant (I quite possibly have several in that position without being aware). If they caught it, there would be an increased risk for them as a family.
People are still trying to liken COVID-19 to seasonal flu as a comparison. Coronavirus/COVID-19 is not flu, you idiots. Trust me, it isn’t. Flu can be prevented if you have an annual vaccination (and they picked the correct strains for it), whereas Coronavirus cannot. Coronavirus appears to be more easily transmitted than flu. But most significantly, the annual mortality rate from flu is about 0.1% of the population, whereas with Coronavirus it is anywhere between over 1% and 6.5% (the latter is the figure in Italy). In the UK, which arguably has the most precise count of infections than anywhere else, we currently have a death rate of about 4.5% based on the number of known infections (it was 1.8% when I first wrote this, and the number of deaths has gone from 10 to 177 in that time). It is far more deadly than flu – and there is no current protection.
As much as 70% of the population could be infected by Easter or during Spring – that would be around 40 million people. The death rate, assuming it stays relatively uniform, would mean that as many as 700,000 could die in the UK alone. And if the infection peaks again next year, this would put the current pandemic right up there with the Bubonic Plague in Mediaeval times when considered across Eurasia as a whole.
This. Is. Not. Flu.
Flu makes you feel lousy, but it only leads to serious complications in some people with underlying health issues, usually (though not exclusively) connected to pneumonia. Coronavirus can send the immune system into overdrive, and the body starts attacking its own cells, leading to multiple organ failure. People with diabetes and heart conditions are vulnerable, as well as those with lung problems (since pneumonia is also an issue). Basically, anyone with a weak immune system in the first place.
I had begun discussing with pupils the possibility of cancellations, and the precautions they should take. I am now stopping lessons completely after one Pass Plus course, which starts tomorrow and finishes Tuesday.
I had a near miss on Thursday. I texted a pupil to remind him of his lesson late Wednesday, and his mum texted back that they had ‘forgotten’ to tell me but they were self-isolating because she had a fever. Shit. I gave him a lesson the week before. Fortunately, having checked again, she just has normal flu and I’m safe. But imagine if it had been Coronavirus.
This pandemic is what you could call ‘serious shit’, and attitudes like ‘there’s nothing to worry about’ and ‘it’s just flu’ are a sure fire way of helping it be so – especially if money is the motivator for feeling that way. This isn’t just about you – it’s about a lot of other people’s lives out there. Literally, their lives.
Any vaccine is at least 12-18 months away from being available, since likely candidates are only now going into trials. The current infection is expected to peak within the next month (though no one can be certain), but it is also expected to peak even higher next winter (also, no one can be sure).
But as I have already said, those with underlying health issues are likely to die from it whenever they get it.
I originally published this article in 2010 during the last recession, when people had been finding the blog on search terms along the lines of “can I go bankrupt as an ADI”, and “can I become an ADI if I’m bankrupt”.
The present Coronavirus crisis is probably the reason for there being a sudden spike in hits to it right now.
Bankruptcy is a legal process involving a person or business which is unable to repay outstanding debts. So, in short, if you can’t pay your bills then yes, you can easily become bankrupt as an ADI. If you are relying on self-employment to earn money the responsibility for success (and failure) lies entirely with you.
Technically, bankruptcy is intended to help both the debtor and the creditors. It takes away the debtor’s debts, and attempts to recoup at least some of the creditors’ outstanding money. However, by having been declared bankrupt, the debtor may find that life is harder in future. They will find it extremely hard to get any sort of credit, for example, and even opening a bank account might prove troublesome.
Unfortunately, it is usually the debtor who comes off worse. In the case of driving instructors, their business probably has very few assets with which to offset their debts (no buildings, factories, machinery, etc.) apart from their car. However, if they own a house, that is worth much more and might be at risk if things go that far.
There is no barrier to being self-employed (which 99.9% of ADIs are) whilst bankrupt, but you can’t be a director of a limited company. As a sole trader you won’t have any trouble though – but make sure you fulfil your duties to HMRC (the taxman) in accordance with your bankruptcy terms. Read up on this carefully.
For prospective ADIs, I would doubt that previous or current bankruptcy would affect your chances of being accepted on to the register of ADIs. In some cases, if your bankruptcy was a result of unscrupulous or even criminal activities, then it might. It is whether you are a fit and proper person that counts, and only DVSA can decide on that. I can’t tell you, and certainly none of the comedians on social media can, though they’ll have a fine old time trying to.
The short answer is yes, you can be an ADI if you are bankrupt – but it isn’t definite.
Now we come to the present situation. Once again, no one can tell you what is going to happen – there are still idiots claiming that this is ‘just flu’ and saying it will all blow over. To anyone who isn’t still swinging through trees and eating bananas as a career, though, it is clearly very serious, and there is every likelihood it will last for some time.
Most ADIs will be extremely concerned, and worrying how they are going to manage.
The most important thing is not to sit back and do nothing. You need to contact your creditors – whoever they are – and ask for help and advice. Do that as soon as possible. Remember that they are fully aware of the situation, and contrary to what those swinging through the trees will tell you on social media they are not trying to destroy you or your business. Frankly, and I’m thinking well ahead now, if any do refuse to help, just plan for when all this does end so that you can sue them into oblivion (or at least have the satisfaction of telling people what they were like on social media and review sites)!
Every conversation you have will be different. Don’t be confrontational, and work to a mutually acceptable payment plan. If you can do that, you’ll stave off bankruptcy. It’s when you can’t pay anything at all that the likelihood of it happening increases. Propose a suggested payment scheme, and bear in mind that they all know what the situation is right now and will probably surprise you with how accommodating they are. So don’t panic.
Another option is to use a debt management company, who can handle all of this for you. Ignore people on social media who tell you to avoid them – this is bankruptcy we’re talking about, which is never to be taken lightly, and you need all the help you can get. When I lost my previous job all those years ago I had a lot of debts (almost £30,000), and it was such a company who got me through it without declaring bankruptcy (and this is just the one I used, so there are others you could consider). It is also worth nothing that at the time, my credit rating was almost zero, whereas now it is as high as it could possibly be. You can survive, and you can recover. But not if you listen to people on social media. Remember that the clue is the word ‘social’ – you’ll be getting a collective opinion, most of which is wrong in the first place.
A word for the future. Being self-employed is always high-risk when situations like this arise. It’s not just when epidemics, the like of which no one has ever experienced before come along, but personal illness and injury. The cash flow can stop in an instant, putting your home and other assets at risk.
I’ve written about this elsewhere, but far too many instructors assume that every penny of their lesson fee is theirs once they take fuel costs off it. It isn’t. For every £25 an ADI takes (assuming a 30 lesson week), probably only around half of that is his once his business overheads are covered. And then, about 20% of what’s left belongs to the tax man. But far too many spend that £25 as if it’s all theirs.
In future – if you can – save. Don’t spend.
Someone recently found the blog on the term ‘what bank should I use as an instructor’?
The answer is simple: It doesn’t matter who you bank with.
All you need to be able to do is pay money in and get it out when you need it. As a sole trader, you really don’t need a business account (which usually has a monthly fee of between £5-£10, and extra fees for depositing cheques), but if that’s what you want then it’s up to you. Some banks will try to insist you have a business account if you bank with them, but my advice would be to find another bank unless you’re happy to be charged for something most will provide to instructors and sole traders for free,
Personally, I bank with Halifax, and all my money goes into and comes out of the same personal account. The vast majority of my driving instructor income goes in via my PayPal Here card reader and PayPal account. Less often, it goes in via bank transfer or a direct PayPal payment. I never accept cheques as lesson payments now, and I only ever get one if I’m being paid by a corporate source (another bank, insurance companies, and so on).
Cheques were the only source of payment problems I ever had. I can’t remember any ‘bouncing’ because pupils didn’t have the funds, but I was always conscious that they could. The main source of problems was how they were filled in – missing numbers or my name spelled wrong, or smeared. It didn’t happen often – but it happened, and it was made worse by the fact that the bank can take weeks or months before sending it back, which you wouldn’t know unless you were looking at your account every five minutes. However, the main drawback was that cheques have no immediate value until you have banked them, and when I first started, the vast majority of pupils paid this way. So if I wanted to maintain my cashflow – and when you’re starting out, you most certainly do – it meant frequent trips to the bank.
Unfortunately, though, even now about 20% of my turnover is still cash, and I can easily accrue several hundred pounds in little more than a week. So I still have to physically pay money in occasionally (though I’m no longer in a major hurry to do so) by way of the ancient pantomime known as ‘going to the bank’.
I have to be honest and say that Halifax is utterly crap as far as its branches are concerned. To start with, they don’t have many left, and those they do are located in places where you find a lot of idiots (e.g. West Bridgford and Arnold shopping precincts). First of all, you have to find somewhere to park, and in West Bridgford that means having to pay (and the traffic wardens hunt in packs, ready to nab you if your ticket has a crease in it or is placed crookedly on your dashboard). In Arnold, if you’re lucky you can find a free roadside spot, but if not then you have to pay there, too. West Bridgford town centre during the day is like a geriatric village of the damned, and even if the car park has spaces, there’s a good chance you won’t be able to get to them because of elderly and disabled drivers stopping next to the fully-occupied disabled bays waiting for someone to move (or trying to avoid buying a ticket while they wait for their partner to come back from shopping). In the afternoon, mummies in Chelsea tractors do the same as they pick their kids up in the car park, or wait for a space near the shops instead of driving round the other side where there’s lots of empty places.
If you do manage to park and get into the Halifax branch, the size of the queue at the till (and the complexity of the transaction each member of it is trying to complete) is inversely proportional to how big a hurry you are in. There’ll be women with pushchairs whose kids are running around screaming, people with bags of coins, those making withdrawals as if they’ve never heard of a cashpoint, and several elderly people with bank books who behave as though they’ve never done this before when they get to the till (and who then go straight to the cashpoint to make sure the money has gone in, and often to take some out again less than five minutes after putting it in).
The number of cashiers on duty is not proportional to anything. They only ever have one unless the number in the queue is approaching three digits. Then they still have one. But sometimes two, although that isn’t proportional to anything either.
On the rare occasions I have used the cashier, the simple act of paying cash into your account takes five minutes. This, too, isn’t proportional to anything. It just takes five minutes – possibly a bit longer if you have a lot of cash and what they count isn’t the same as what you counted. The vast majority of that five minutes is taken up by their printing device, which takes nearly that long to chisel your receipt on to small clay tablet.
Of course, there is the Fast Deposit machine. This miracle of technology does exactly the same thing as the cashier, and it even takes exactly as long as the cashier. All without involving the cashier at all. Brilliant. Except that Halifax branch staff have been encouraging as many people as possible to use it to try and keep the queue for the till inside the building. Many of those thus encouraged seem incapable of understanding that those little metal things called ‘staples’ and ‘paper clips’ are not supposed to go into the machine, so it is frequently not working. And even when it is, if there’s more than one person waiting to use it, you’re no better off than standing in line waiting for the till. It was that which led to my last ever visit late last year.
I went in, and there was the usual queue for the single cashier. There was only one person at the Fast Deposit gizmo, but it quickly became clear he was having a financial discussion of some sort on his phone. He had several cards and a thick wad of cash. He wasn’t actually using the machine, but he was going to, and the supernumerary cards suggested the money wasn’t all going into the same account. So he was effectively three or more people – all of them f***ing stupid – all by himself. I stormed out – I swore audibly – and when I got home began looking for another bank.
If I’d have calmed down a bit, I would have realised that it was going to be the same whoever I banked with if I needed to visit a branch. Years ago, while I was with HSBC, I went into the now closed branch in Keyworth, only to get stuck behind a local farmer who was paying in hundreds of pounds in coins! And whenever I used to go in NatWest or Barclays, the cashier getting up and disappearing in order to deal with whatever the idiot at the front of the queue was trying to do would make my blood boil. But it was while I was angrily looking for a new bank that I discovered I was now able to pay into my Halifax account at the Post Office.
At first glance, this might not seem the panacea it has turned out to be. That’s because the people who frequent Post Offices are a hundred times more stupid than those at the bank branches. I recently got stuck behind someone who was apparently an eBay seller, and they had at least 30 small packages, each of which had to be individually bagged and labelled for some unfathomable reason (when I sell on eBay, I bag and label at home and only use the Post Office as a drop off if they won’t fit in a post box). Or in the village branches, they are gathering places for the elderly to have a chat, often with the elderly Postmaster (who also runs the tiny general store it is attached to), and if you walk in as an unfamiliar face, that chat takes absolute precedence over whatever it is you want to do. But the major advantage is that there are a lot of them, parking is usually a doddle, and there is always one either very close to home, or along the route as you are driving between lessons. And paying cash or cheques in at a Post Office is quick – I am usually in and out in less than two minutes.
I don’t know how long I’ve been missing out on this, because I looked into a it a few years ago for precisely the same reasons as I did this time and the service was only provided to the big banks (which didn’t include Halifax). But it seems to be almost universal now.
Why don’t you accept cheques?
There is no need. Anyone who uses cheques to pay for stuff will have a cheque guarantee card, and these days those things are chip & pin cards. Since I can take card payments, a cheque is a pointless complication. The only possible benefit to a pupil who wanted to do it would be to defer payment by however long it takes for me to bank it, plus however long it takes my bank and theirs to process it. If I didn’t pay it in immediately, there’s an increased chance that they will be skint again by the time I did. For me, there is no benefit at all, since it forces me to go to the bank if I want the money, and that is just wasted time and all of the hassle I have already outlined.
Other instructors take cheques
That’s because they can’t take card payments, meaning that unless they get paid in cash (including driving the pupil to a cashpoint to obtain it), or do it by bank/PayPal transfer, a cheque is the only alternative. Getting pupils to pay by bank or PayPal transfer is a hassle in itself, as is driving to cash machines a lot of the time (especially when they’re out of order or there’s traffic). When mine do it by transfer, I often have to keep chasing them because they ‘forget’. I’ve got better things to do,
What if people can only pay you by cheque?
I would imagine the number of people in the entire country who are truly in that position could be counted on the fingers of one hand. If they can write cheques, they will need a cheque guarantee card, and that doubles as a chip & pin – which I can accept directly. If the bank won’t give them one, there is probably a damned good reason for it, and I have no desire whatsoever to find out why by accepting non-guaranteed cheques from them.
As I said, I can handle cheques. I choose not to as a routine method of payment because there is no good reason for them these days as a way of paying for driving lessons. It has not been an issue, and if it ever became one then I would consider each case on its merits. It isn’t one of my accepted methods, that’s all.
Why bother with a card machine?
It’s quick, and I get paid immediately. There’s no chasing, and no risk of loss to me. Since I started using such a device nearly seven years ago I have taken well over £100,000 that way (and yes, it all gets declared when I do my taxes, as does any cash I take). It also means I have good records for tax purposes. Frankly, I wish everyone would pay by card, but it isn’t uncommon for people to have their own reasons for insisting on cash – even if it involves as much as £700 for a complete course!
Isn’t it illegal to use a personal account for business transactions?
No. You only need a business account if you are a limited company. Sole traders – such as ADIs – are operating perfectly legally if they use a personal account. The only reason for choosing a business account would be to keep things simple for when you do your tax return – but it isn’t that hard in the first place for instructors.
Note also that some banks don’t like it if you use a personal account this way and will expect you to open a business account – and close your personal one if you don’t. That’s between you and the bank’s policies, and not a legal issue.
HMRC will audit you if you use a personal account
Well, I’ve been doing this for long time and I have never been audited. I wouldn’t be worried if I was, because my accounts are clear (and true). HMRC are far more interested in you if your numbers don’t add up properly – if your profit ratio isn’t what it should be, or if your declared turnover doesn’t ring true, for example.
What I have noticed is that at least some ADIs who make this claim will also have boasted at some point how little tax they pay, and if they’re saying it because they’ve been audited, well, there’s the real reason right there. In my case, I simply pay what is required after all my overheads have been subtracted from all my turnover. If you’re honest, and doing this full time, there’s no escaping the fact that you need to pay taxes – and the annual figure when you complete your Self Assessment isn’t going to be very attractive if you haven’t been planning for it throughout the year.
Too many people start in this job, end up working 30 hour weeks, but don’t put their taxes aside as they go along. Then, at the end of the year, they need to find around £1,000 to pay their bill – usually, just after Christmas to make matters worse. Fair enough, you pay half in January, and the other half in July, but it’s still a lot.