Tax Checks and Rule Changes for Taxi Licences in 2022

There have been some changes to the process of renewing a taxi licence in 2022, and the biggest one is likely the new conditionality tax checks. Starting on April 4, 2022, all self-employed taxi and PHV drivers will be required to pass this tax check to renew their licences.

What Is a Tax Check?

A tax check is a process that must be carried out before you apply to renew your operational licence. Once complete, you’ll be given a code that will expire in 120 days. You will need to use this code at the moment you turn in your licence application to a licensing authority. Otherwise, your application will not be processed.

You can use a tax check code for multiple licence applications, so long as you are applying for the same kind of licence. If you wish to apply for different kinds of licences, you will have to complete an individual tax check for each one.

Fortunately, getting a tax check is a painless process that takes no more than a few minutes and only needs to be done every 3 years.

Who Will Need a Tax Check?

Those looking to renew a license for any of the following licenses will be able to do so beginning in April:

  • Taxi driver
  • Private hire driver
  • Scrap metal collector
  • Private hire vehicle operator
  • Scrap metal site

Additionally, circumstances that would require you to get a tax check are the following:

  • Applying for a licence type you hold with a different licensing authority.
  • Applying for the same licence you held but has been expired for less than a year.

It should be noted that these new changes, along with the need for a tax check, do not apply to those that will be applying for a licence for the first time. Or for those who previously held a license but had not held that license type in over a year.

How will the change affect taxi companies?

Those taxi companies already registering will not be affected, the tax check aims to crack down on tax avoidance and those setting up temporary or soon to be dormant companies from avoiding tax. Taxi companies operating across the UK will not be inconvenienced. Established taxi companies providing services in their local area including those offering airport taxis and transfers will benefit from rival companies being held accountable for tax fraud.

Why Create the Tax Conditionality?

HMRC understands that the majority of sectors are paying their due taxes. This new change is meant to fight the hidden economy and level the playing field so that lawfully compliant businesses are not behind the curb compared to those who are bypassing taxes.

Tax conditionality is a simple element used in HMRC’s strategy to combat the hidden economy, which is composed of a small group of individuals and companies that are hiding their sources of taxable income from HMRC.