Important Changes for Taxi, Private Hire or Scrap Metal Licence Applications.
Need to apply for a Taxi, Private Hire or Scrap Metal licence soon?
The Government have announced that there will be changes to the application process which you need to be aware of from 4th April 2022.
The rules are changing if you’re an individual, company or any type of partnership applying for a licence for a:
- Taxi driver.
- Private hire driver.
- Private hire vehicle operator.
- Scrap metal site.
- Scrap metal collector.
Government guidelines state that if you make an application on or after 4th 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.
The Tax Check
You must carry out the tax check yourself. You cannot ask a tax agent or adviser to do this on your behalf.
The tax check will ask questions about how you pay any tax that may be due on income you earn from your licensed trade.
For example, if you’re an employee paid through PAYE: Pay As You Earn (PAYE):
This is the system employers use to take Income Tax and National Insurance contributions before they pay wages.
If you are Self-Employed: Self-Assessment tax returns:
If you are self-employed, you will pay Income Tax and National Insurance through Self-Assessment. You will need to fill in a tax return every year.
You must send a tax return if, in the last tax year (6th April to 5th April), you were:
- Self-employed as a ‘sole trader’ and your annual gross trading income was more than £1,000.
- A partner in a business partnership.
The tax check should only take a few minutes. You will be able to complete it through the GOV.UK website where there will be guidance to help you through it. Anyone who needs extra support will be able to complete the tax check by phone through HMRC’s customer helpline.
After you have completed the tax check you will be given a 9-character tax check code.
You will need to give the code on your application to the licensing authority, so they can confirm you have carried out a tax check.
NOTE: You will not be granted a licence if you do not give a tax check code to your licensing authority.
Your licensing body will only receive confirmation from HMRC that you have completed the tax check, they will not have access to information about your tax affairs.
Guidance about how to complete a tax check will be published in January 2022 on the GOV.UK website.
What you need to do before April 2022
Get a Government Gateway user ID and password:
You will need a Government Gateway user ID and password to complete a tax check, so you should make sure you have one before you need to make your licence application.
If you do not have a user ID, you can create one by registering for HMRC online services using the link below:
Check your HMRC records are up to date:
You can check your details are up to date when you get a Government Gateway user ID, or by signing in to HMRC Online Services.
If your details need updating, you can tell HMRC about a change to your:
- Personal details.
Find out if you must pay tax on your earnings from your licensed trade if you are not already registered with HMRC.
Check if you:
- Must send a Self-Assessment tax return if you are self-employed or in a partnership.
- Need to register for Corporation Tax if you operate a limited company.
NOTE: If you only pay tax through PAYE you do not need to check your records.
To avoid problems and delays to your licensing applications make sure to complete these steps as early as possible and complete the tax check as soon as you can. Delays to the application process may lead to loss of income as without a license you are unable to operate your business.
If you want help with an application or with getting a better understanding of how this may affect you, please get in contact with us.