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TAX CHECKS: New Scotland and Northern Ireland taxi driver tax checks will begin in October 2023

New taxi tax checks will become operative and affect licence applications made in Scotland and Northern Ireland from 2 October 2023.

The measure will affect those who apply for licences to drive taxis or private hire cars and operate a booking office. The checks are already live in England and Wales, but will now extend to licensing bodies in Scotland and Northern Ireland who administer licence applications.

The tax check will be carried out by the licensing body, and confirmation from HMRC that the applicant has completed the check must be obtained before the renewed licence application can be considered. The policy objective is to address part of the hidden economy, which is estimated to cost the Government £3.2 billion in unpaid taxes.

The measure was developed through three public consultations conducted by HMRC, with the third consultation focusing on how to implement tax conditionality in Scotland and Northern Ireland. The policy was initially introduced in England and Wales in April 2022, and it will now be extended to Scotland and Northern Ireland from October 2023.

This policy aims to help level the playing field, making it more difficult for people to enter or stay in the hidden economy. It is also expected to make access to licences dependent on complying with tax obligations, thereby promoting tax compliance and ensuring that the funds generated from taxes can be used for vital public services.

Who will be affected?

In Scotland: individuals, partnerships (including limited liability partnerships ) and companies applying for licences to either drive taxis or private hire cars (PHCs), operate a booking office or similar or deal in scrap metal.

In Northern Ireland: individuals applying for licences to drive taxis.

The measure also affects licensing bodies in Scotland and Northern Ireland that administer those licence applications.

General description of the measure

The measure will introduce a check on tax registration (a “tax check”) for renewed applications in Scotland for licences to:

  • drive taxis and PHCs

  • operate a booking office

  • carry on the business of a metal dealer on a site

  • carry on business as an itinerant metal dealer

and in Northern Ireland to:

  • drive a taxi.

An applicant who wishes to renew a licence will need to carry out a tax check. The licensing body (a local authority in Scotland or the Driver and Vehicle Agency in Northern Ireland) will have to obtain confirmation from HMRC that the applicant has completed the check before being able to consider their renewed licence application.


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