TAXI TAX CHECKS GO LIVE: Complete run through of new changes affecting ALL taxi and PHV drivers

HM Revenue and Customs (HMRC) have now 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 new check, which will be required from today (4 April 2022), will not include any calculations. It simply confirms a driver is registered for tax on their licensed taxi or private hire vehicle income.

Designed to be quick and straightforward, the online process should only take a few minutes and will only be required every few years. It forms part of a much wider range of checks that licensees are already required to carry out. 

You’ll need to complete the tax check when you renew your licence as a:

• Driver of a taxi (hackney carriage)

• Driver of a private hire vehicle (and dual licences)

• Private hire vehicle operator

• Scrap metal dealer mobile collector

• Scrap metal dealer site.

HMRC has worked closely with sector representatives and licensing bodies to communicate the changes and to support those affected.

In January, HMRC published full guidance on GOV.UK to help licensees and licensing bodies prepare for the new tax checks that will be introduced in Schedule 33 of Finance Act 2021. 

For anyone who has missed articles published in TaxiPoint, on social media, at industry events, or on webinars and posts on GOV.UK, the guidance is the permanent resource to help prepare for the changes.

If you should have been registered to pay tax and have not been, HMRC will work with you to get you back on the right track. It’s your responsibility to get your tax right, but HMRC is there to help.

This is said to be about creating a level playing field for the compliant majority in these sectors, so the majority who do play by the rules won’t be disadvantaged by the minority who do not.  

Getting a new licence: If you are applying for a licence for the first time, you will not need to complete the tax check. However, licensing bodies will direct you to HMRC guidance about your tax responsibilities and ask you to confirm that you are aware of this guidance.

Renewing a licence: From 4 April 2022, if you renew or apply for a subsequent licence under a different licensing body, you’ll have to do a tax check. You’ll be able to do this online through the new tax check digital service.

Licensing bodies will send out clear guidance to licence holders ahead of their renewal date. HMRC has worked closely with licensing bodies, the taxi/private hire sector and their representative bodies to ensure they have the guidance and tools needed to prepare applicants for these changes, including materials translated into different languages.

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.

What if I’m applying for more than one licence?

You can use one tax check code for more than one licence application, as long as all the applications are for the same type of licence (for example, they are all for taxi driver licences but with different licensing authorities).

If you’re applying for different types of licence (for example, a private hire driver licence and a private hire vehicle operator licence) you must complete a tax check for each one.

Renewing London Hackney Carriage driver and scrap metal dealer licences

Your existing licence may be extended until a final decision whether to grant your licence application has been made (including a decision on appeal).

However, if you do not give the licensing authority a valid tax check code your licence will expire on whichever of the following dates is the latest:

• 28 days after the licensing authority asked for your tax check code

• the date your licence expires.