The new compliance check required for Taxi drivers in 2022 

In a change that will affect thousands of self-employed taxi drivers, new compliance checks are coming into effect from April 2022. The tax check must be passed as a condition of renewing your licence to operate, which means that if you cannot prove your tax compliance you will not be able to continue driving. Our friend, Julia Kermode at IWORK very kindly offered her expertise on this subject and has provided important information around the changes and more.

What’s changing and why?

The government has been discussing making this change for some time, since 2016 in fact, and they are now proceeding with it coming into effect from April 2022. They aim to support drivers in meeting their tax obligations, and anyone applying for or renewing a licence to drive taxis or private hire vehicles will be affected. 

If you make an application on or after 4 April 2022 you’ll need to complete a tax check if you’re:

• renewing a licence
• applying for the same type of licence you previously held, that ceased being valid less than a year ago
• applying for the same type of licence you already hold with another licensing authority

IMPORTANT: You must carry out the tax check yourself. You cannot ask a tax agent or adviser to do this on your behalf.

How to do the tax check

It should only take a few minutes to complete the tax check, which should be done online through your Government Gateway account on GOV.UK. You will only need to answer a few questions to tell HMRC how you pay any tax due on income you earn from your licensed trade. It should only take a few minutes.

What next?

Once you’ve completed the tax check, you’ll get a code which you must give to your licensing body. The licensing body cannot proceed with your application or renewal until the tax check is completed and they’ve received the code. 

Your licensing body will subsequently receive confirmation from HMRC that you’ve completed the tax check, and will be able to issue your licence as appropriate. 

NB - your licensing body will not receive any information about your tax affairs.

How long will it take?

As the checks are not yet in place, it is impossible to know how long the process will take. HMRC anticipate that the process will be straight forward and won’t unduly delay licence applications and renewals. However, as it will be a new system it would be sensible to assume there could be teething problems initially. 

Remember that your licence renewal will be conditional on passing the new tax compliance check. In the worst case scenario this means that you would not have a licence to operate and would be unable to earn income until you have passed the tax compliance check. 

Therefore, we strongly recommend renewing your licence as early as possible so that you have time to deal with any delays or problems. Please do not overlook this extra admin, or you might risk being unable to trade. 

If you’re a taxi firm and wanting to know more about the Cashplus Business bank account and how it could benefit you, don’t hesitate to drop us an email. The account comes with useful features such as receipt capture, spending insights and also integrates with most leading accountancy software.

Find out more about the Cashplus Business bank account, where you can apply for an account in minutes and get an instant online decision.

About Julia Kermode

Julia is a podcaster, network builder and campaigner with a passion for the rights of independent workers. She founded IWORK during the pandemic to support and champion this important part of the workforce, many of whom were key workers putting themselves at risk in order to support others. IWORK empowers the UK’s army of temporary workers, gig workers, self-employed, freelancers and contractors – the lifeblood of the economy in all sectors.

This content was created on November 6th 2021