Costs

 At current rates a good driving instructor can easily earn £600 per week based upon 30 lessons at £20 per hour. If you want to earn even more, and you promote your business properly as outlined above, then more is possible.

However, it is obvious that any business, no matter what it is, cannot run without incurring some overheads. It follows therefore that you have to take these costs into account and deduct them from the revenue you receive from pupils to arrive at your net earnings - that is the money you have left before you pay tax.

With this in mind you should keep ALL receipts for anything you buy relating to your business for presentation to your accountant at the end of the financial year. Such expenditure is tax deductible and the receipts may be required to be made available to the tax inspector in support of your claim.

To help you calculate your net earnings you should take into account the following, but it should be pointed out that there are many variables and any figures quoted are purely for ‘general guidance’ only. Also they are expressed in terms of cost per pupil hour, based upon an average of 30 hours per week.

1.        By far the largest single outlay is the vehicle. If you buy a vehicle for say £7500 and keep it for three years the value will depreciate at approximately 20% per annum. Its’ resale value may then only be about £3850. It has therefore cost you £3650, or about 80 pence per pupil hour, calculated over the three year period.
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2.        The most expensive cumulative annual outlay is, believe it or not, fuel. If you average just 15 miles per lesson, depending on the vehicle, you will spend approximately £65 per week on fuel, or about £2.15 per pupil hour.

3.        Insurance can cost you about £1000 per annum depending again on the vehicle, or about 65 pence per pupil hour.
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4.        You should, to be on the safe side, allow vehicle maintenance and servicing costs of as much as £500 per annum, or about 30 pence per pupil hour.

5.        Car tax could cost around £175 per annum, or about 10 pence per pupil hour.

6.        Advertising is essential to ensure a continuous flow of pupils and even if you employ all the techniques outlined above it will only cost you about £1 per pupil hour.

7.        An accountant will cost around 12 pence per pupil hour.

8.        Your National Insurance contributions will cost you around 7 pence per pupil hour.

All these calculated together show that you should allow for costs at the rate of around £5.20 per pupil hour, leaving a net income of around £450 per week before tax. Obviously the more hours you do, or the more you charge per lesson, the more you earn.

You must also remember that if you want a pension, loss of earnings or health care insurance these costs should also be taken into account. Your accountant will advise you whether or not they are tax deductible depending upon their nature.

IT CANNOT BE EMPHASISED ENOUGH THAT THESE FIGURES ARE ONLY INTENDED AS A ROUGH GUIDE AND ARE PROVIDED TO GIVE PEOPLE CONSIDERING DRIVING INSTRUCTION AS A CAREER SOME IDEA OF WHAT IS INVOLVED FINANCIALLY.

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