Updated: Oct 31, 2021
HMRC have released fresh details on new tax rules all taxi and private hire drivers and operators must follow when applying for a new or renewed licence on or after 4 April 2022.
The rules are changing if you’re an individual, company or any type of partnership applying for a licence for a:
private hire driver
private hire vehicle operator
scrap metal site
scrap metal collector.
If a driver or operator makes an application on or after 4 April 2022 they will need to complete a tax check if they are:
renewing a licence
applying for the same type of licence previously held, that ceased being valid less than a year ago
applying for the same type of licence already held with another licensing authority.
According to new HMRC advice the taxi drivers and operators must carry out the tax check themselves. They cannot ask a tax agent or adviser to do this on their behalf.
The tax check will ask questions about how the licence applicant pays any tax that may be due on income earned from their licensed trade.
After completing the tax check the applicant will be given a 9-character tax check code. Drivers and operators will need to give the code on their application to the licensing authority, so they can confirm a tax check has been carried out.
Most importantly HMRC say no licence will be granted if no tax check code is given to the respective licensing authority.
Guidance about how to complete a tax check will be published in January 2022.
What should drivers do before April 2022?
Get a Government Gateway user ID and password
Drivers and operators will need a Government Gateway user ID and password to complete a tax check. HMRC have urged applicants to make sure they have one before they need to make their licence application.
If you do not have a user ID, you can create one by registering for HMRC online services.
Check your HMRC records are up to date
You can check your details are up to date when you get a Government Gateway user ID, or by signing in to HMRC Online Services.
If your details need updating, you can tell us about a change to your:
Find out if you must pay tax on your earnings from your licensed trade if you’re not already registered with HMRC
Check if you:
must send a Self Assessment tax return if you’re self-employed or in a partnership.
need to register for Corporation Tax if you operate a company.
If you only pay tax through PAYE you do not need to check your records.