In a change that will affect thousands of self-employed taxi drivers, new compliance checks are coming into effect from April 2022. We previously reported on the development when it was announced in July, and now more information has been published by the government. Anyone that is a taxi-driver or operates private hire vehicle will be required to pass a tax compliance test before their licence to operate can be renewed. The requirements are also being rolled out to the scrap metal industry.
The rules are changing if you’re an individual, company or any type of partnership applying for a licence for a:
- taxi driver
- private hire driver
- private hire vehicle operator
- scrap metal site
- scrap metal collector
If you make an application on or after 4 April 2022 you’ll need to complete a tax check if you’re:
- renewing a licence
- applying for the same type of licence you previously held, that ceased being valid less than a year ago
- applying for the same type of licence you already hold with another licensing authority
You must carry out the tax check yourself. You cannot ask a tax agent or adviser to do this on your behalf.
About the tax check
You will be able to complete this tax check on GOV.UK, through your Government Gateway account. You will only need to answer a few questions to tell HMRC how you pay any tax that may be due on income you earn from your licensed trade. It should only take a few minutes.
When you’ve completed the tax check, you’ll get a code. You must give this code to your licensing body. The licensing body cannot proceed with your licence application or renewal until the tax check is completed and they’ve received the code.
Your licensing body will only receive confirmation from HMRC that you’ve completed the tax check, they will not have access to information about your tax affairs.
Whilst the outline of what is required sounds straight forward, there could be teething problems initially. We would recommend seeking to renew your licence as early as possible so that there is maximum time to sort out any difficulties, because, in the worst case scenario you would be unable to earn income without a licence to operate. This is extremely unlikely to happen in practice, but it would be sensible to allow as much time as possible just in case.