New rules on tax checks
From 4 April 2022, to be granted or renew a licence to drive a taxi or private hire vehicle, operate a private hire business, or deal in scrap metal you will need to complete a tax check with HM Revenue and Customs (HMRC).
From 4 April 2022, there will be a small addition to the checks licensing bodies already have in place. You will need to complete a tax check with HM Revenue and Customs (HMRC) when you renew your licence to:
- drive taxis or private hire vehicles
- operate private hire vehicle businesses (Private Hire Operator)
- deal in scrap metal.
The changes will only apply in England and Wales.
The government has published further guidance to help licensees and licensing bodies prepare for the new tax checks: GOV.UK - Applicants guide to completing a tax check.
You are asked to read this guidance and to familiarise yourself with what you will need to do for the tax check.
Please note: You will be able to complete a tax check from 7 March 2022.
How the changes may affect you
What you need to do will depend on whether you’re applying for a licence for the first time or whether you’re making a subsequent application, such as renewing a licence.
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 ask you to read HMRC guidance on what you need to do to be properly registered for tax in the future and you’ll need to confirm you have done this.
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 a digital service.
About the tax check
You will be able to complete this tax check on GOV.UK, through your Government Gateway account. If you do not already have a Government Gateway account, you can sign up on GOV.UK
The tax check should only take a few minutes. You will only need to answer a few questions to tell HMRC how you pay any tax that may be due on income you earn from your licensed trade. There will be guidance on GOV.UK, and anyone who needs extra support will be able to complete the tax check by phone through HMRC’s customer helpline.
When you’ve completed the tax check, you’ll get a code. You must give this code to your licensing authority. The licensing authority cannot proceed with your licence application or renewal until the tax check is completed and they’ve received the code. Your licensing authority will only receive confirmation from HMRC that you’ve completed the tax check, they will not have access to information about your tax affairs.
What you need to do
If you have not registered to pay tax on earnings from your licensed trade, please go to GOV.UK to check if you need to register as soon as possible:
- If you’re an employee, find information on PAYE (Pay as You Earn) at GOV.UK - how you pay income tax
- If you’re self-employed, find information on registering for Self-Assessment at GOV.UK - register for self assessment
- If you operate through a company, find information on Corporation Tax at: GOV.UK - corporation tax
If you should have been registered to pay tax and have not been, HMRC will work with you promptly and professionally to get you back on the right track. It’s your responsibility to get your tax right, but HMRC are there to help.
You can get help from HMRC if you need extra support, for example if you need information in a different format or need help filling in forms. Visit GOV.UK and search ‘Get help from HMRC if you need extra support’.
For further guidance on the tax check, please visit: GOV.UK - changes for taxi private hire or scrap metal licence applications from April 2022.