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TAX CHECKS: Scotland and Northern Ireland taxi drivers prepare for April 2023 tax checks
Fresh government policy papers relating to new taxi driver tax checks in Scotland and Northern Ireland were released with the goal of going live from April 2023.
HM Revenue and Customs (HMRC) recently introduced the new tax check that must be completed when people renew their licences to drive taxis, or drive and operate private hire vehicles, in England and Wales.
The measure will introduce a check on tax registration (a “tax check”) for renewed applications in Scotland for licences to drive taxis and private hire cars and also to operate a booking office.
The measure will also extend to a check on tax registration for renewed applications in Northern Ireland to drive a taxi.
HMRC hopes this will address part of the hidden economy which consists of individuals and businesses with sources of taxable income that are entirely hidden from HMRC. The hidden economy tax gap (the difference between the amount of tax that should, in theory, be paid, and what is actually paid is estimated to be £3.2 billion for 2020 to 2021.
What is a ‘tax check’?
A tax check confirms that you’re registered for tax, if necessary. It will ask questions about how you pay any tax that may be due on income you earn from your licensed trade.
You must carry out the tax check yourself. You cannot ask a tax agent or adviser to do this on your behalf.
After you complete the tax check you’ll be given a 9-character code. This is your tax check code. You must give it to the licensing authority with your licence application — they will not be able to process your application without it.
Tax check codes expire after 120 days, so if you make a licence application for another licence after that time, you’ll need to carry out a new tax check for it.
If you’re a partner making a licence application on behalf of a partnership you must complete a tax check for yourself. Your licensing authority will tell you if any other partners also need to complete a tax check.
Your licensing authority will need your tax check code before they can consider your licence application.
