TAX LAW: All taxi and PHV driver revenue made via digital booking platforms WILL be reported to HMRC

In an effort to enhance transparency and ensure tax compliance for digital platform transactions, new laws have been introduced requiring taxi and private hire operators to report their drivers' earnings to Her Majesty's Revenue and Customs (HMRC).

The legislation, known as the "Reporting Rules for Digital Platforms," aims to create a level playing field for all businesses operating within the digital marketplace. Under these rules, all taxi and private hire digital platforms will be obligated to collect and report revenue data from their drivers to HMRC.

Starting from January 2025, driver earnings will be reported annually directly to HMRC. To establish compliance, platforms will request additional details from their drivers, such as National Insurance numbers, which will become a part of their records. This initiative seeks to streamline the reporting process and promote tax transparency.

From January 2024, all digital taxi and private hire vehicle (PHV) operators operating in the UK will be legally required to collect and store revenue data for all registered drivers. This nationwide legislation change aims to impact an estimated 2-5 million businesses offering services through digital platforms.

While digital platforms encompass a wide range of services, including food delivery, freelance work, and short-term accommodation rentals, taxi and private hire services will also be subject to these regulations. This means companies must comply with the reporting requirements regardless of the nature of their digital platform.

To facilitate compliance, digital platforms will collect and share relevant data, including bank account information if held by the platform, with HMRC. In cases where appropriate, this information may also be shared with other tax authorities. The data collected will aid in identifying individuals or companies and assessing the risk associated with their tax liabilities.

By holding all parties accountable, the aim is to create a fair and level playing field for businesses operating within this sector while supporting taxation requirements and national revenue systems.