The new government tax check on licence applications was introduced on 4th April 2022. This means that tax checks are mandatory through the Finance Act 2021, to confirm that a licence applicant is correctly registered for tax.
These rules will differ, depending on whether the licence applicant is new or already licensed.
Applicants and licence holders are advised to contact either HM Revenue and Customs (HMRC) or your accountant if you require specialist advice about your tax obligations.
Existing licence holders and licence renewals
HMRC's tax check must be completed when a hackney carriage driver, private hire driver or private hire operator renews their licence to drive taxis and private hire vehicles and operate a private hire business in England and Wales.
If a tax check is not completed as required by HMRC, we will not be able to consider your licence renewal application and your current licence will expire.
If a current licensed driver or private hire operator renews a licence or decides to apply for a licence with a different licensing authority after 4th April 2022, they'll have to do a tax check and this can be done online. A tax check will be required on each and every occasion a renewal licence application is submitted.
Existing licence holders are encouraged to submit their renewal licence applications at least eight weeks in advance. This allows us to process your application, along with our new legally mandated responsibility of making tax checks, to ensure your licence renewal is issued before your current licence expires.
New taxi licence applicants
If a hackney carriage or private hire driver applicant or a private hire operator applicant is applying for a licence for the first time, they will not need to complete the tax check.
However, we will ask applicants to read the guidance on what they need to do to be tax registered in the future, ready for any future licence renewal.
Preparing for a tax check
HMRC use an online tax check service which began in March 2022. The service is for drivers and operators to complete a tax check. HMRC recommends drivers and operators prepare by for tax checks to:
- ensure they are registered to pay the appropriate taxes on their licensed income
- continue to be licensed at the point of renewing your licence.
If you've not registered to pay tax on earnings from your licensed trade, you can visit GOV.UK to access HMRC's online services to:
- register an account or sign in
- complete a tax check using your Government Gateway account.
You'll 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.
When you've completed a tax check, you'll receive a 9 digit code and you must share this code with us. We cannot progress your licence application until the tax check is complete and we have received the code. The code is only valid for 120 days, but if it expires you can get another code.
We'll only receive confirmation from HMRC that you've completed the tax check and we will not have access to your tax account. The check will not include any calculations, it is simply to confirm that someone is appropriately registered for tax.