New rules on tax checks
Since 4th April 2022 in order to renew a licence to drive a taxi or operate a private vehicle hire business you need to complete a tax check with HM Revenue and Customs (HMRC).
On 4th April 2022 an additional requirement came into force. You now need to complete a tax check with HM Revenue and Customs (HMRC) before you can renew your licence to:
- drive taxis or private hire vehicles
- operate private hire vehicle businesses (i.e. if you are a Private Hire Operator)
- deal in scrap metal.
The changes will only apply in England and Wales.
How the changes may affect you
What you need to do depends on whether you’re applying for a licence for the first time or whether you’re making a subsequent application, such as renewing a licence.
Obtaining a new licence
If you are applying for a licence for the first time, you will not need to complete the tax check. However, we will ask you to read HMRC guidance on what you need to do to be properly registered for tax in the future and you will need to confirm you have done this.
Renewing a licence
As of 4th April 2022, if you renew with the same licensing authority or if you apply for a subsequent licence under a different licensing body, you need to do a tax check. You do this online and you must do it yourself i.e. an agent/accountant cannot do it on your behalf.
About the tax check
If you do not already have a Government Gateway account, you need to sign up and set one up on GOV.UK. You complete the tax check on GOV.UK, through your Government Gateway account.
The tax check should only take a few minutes. You need to answer a few short questions to tell HMRC how you pay any tax that may be due on income you earn from your licensed trade. There is guidance on GOV.UK, and anyone who needs extra support will be able to complete the tax check by phone through HMRC’s customer helpline.
When you have completed the tax check, you will get a code. You must give this code to us (the Licensing authority) as part of your application.
We input the code online with HMRC and we will see verification that you have completed the tax check. We do not and will not have access to any information about your tax affairs. Once you obtain the tax check code, it is valid for 120 days.
What you need to do
If you have not registered to pay tax on earnings from your licensed trade, please go to GOV.UK to check if you need to register as soon as possible:
- If you are an employee, find information on PAYE (Pay as You Earn) at GOV.UK - how you pay income tax
- If you are self-employed, find information on registering for Self-Assessment at GOV.UK - register for self assessment
- If you operate through a company, find information on Corporation Tax at: GOV.UK - corporation tax
If you should have been registered to pay tax and have not been, HMRC will work with you promptly and professionally to get you back on the right track. It is your responsibility to get your tax right, but HMRC are there to help.
You can get help from HMRC if you need extra support, for example if you need information in a different format or need help filling in forms. Visit GOV.UK and search ‘Get help from HMRC if you need extra support’.
For further guidance on the tax check, please visit: https://www.gov.uk/guidance/complete-a-tax-check-for-a-taxi-private-hire-or-scrap-metal-licence