Tax Conditionality
Information for Licence Holders on Tax Conditionality
On 4th April 2022 the government put in place new tax requirements for applications to certain licences. This is supported by a new digital service, developed by HMRC. It helps people in the taxi and scrap metal industries to complete a new tax check.
Most people are registered to pay tax and this is about ensuring everyone pays the tax they should, creating a level-playing field for the compliant majority. HMRC have worked with industry bodies to make this as straightforward as possible. The check should only take a few minutes every few years and is simply to confirm that someone is appropriately registered for tax.
You need to complete a tax check when you renew your licence as a:
- Driver of taxis - includes hackney carriage, private hire and dual licences
- Private hire vehicle operator
- Scrap metal dealer mobile collector
- Scrap metal dealer site
About the tax check
You can complete a tax check on GOV.UK, through your Government Gateway account. You 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. 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. There is 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 us when applying to renew your licence. We cannot proceed with your licence application or renewal until the tax check is completed and we’ve received the code.
We will only receive confirmation from HMRC that you’ve completed the tax check, we will not have access to information about your tax affairs.
Click here to complete a tax check
Registering for tax
You may have to pay tax through Pay as You Earn (PAYE), Self Assessment and/or Corporation Tax, depending on your circumstances.
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.
If you’re an employee: Pay As You Earn (PAYE)
Most employed people pay Income Tax through PAYE. This is the system employers use to take Income Tax and National Insurance contributions before they pay wages.
For more information on PAYE, go to www.gov.uk/income-tax/how-you-pay-income-tax
If you’re self-employed: Self Assessment tax returns
If you’re self-employed you’ll pay Income Tax and National Insurance through Self Assessment. You’ll need to fill in a tax return every year.
You must send a tax return if, in the last tax year (6 April to 5 April), you were:
• self-employed as a ‘sole trader’ and their annual gross trading income was more than £1,000;
• a partner in a business partnership.
For more information on registering for Self Assessment, go to www.gov.uk/register-for-self-assessment
If you operate through a company: Corporation Tax
Companies need to register for corporation tax when they start doing business or restart a dormant business.
For more information on Corporation Tax, go to https://www.gov.uk/corporation-tax
Further information and guidance
Further information and guidance is available from the GOV.UK website here: