Information about the new condition on HMRC tax checks known as ‘Tax conditionality’
What is changing
From 4 April 2022 you will need to complete a tax check with HM Revenue and Customs (HMRC) when you renew your licence to
- drive taxis or private hire vehicles
- operate private hire vehicle businesses
- deal in scrap metal
How changes may affect you
What you need to do will depend on whether you are applying for a licence for the first time or whether you are making a subsequent application such as renewing a licence.
If you are applying for a licence for the first time you will not need to complete the tax check. However, licensing bodies will ask you to read HMRC guidance on what you need to do to be properly registered for tax in the future and you will need to confirm you have done this.
Renewing a licence
From 4 April 2022, if you renew or apply for a subsequent licence under a different licensing body, you will have to do a tax check. You will be able to do this online through a digital service.
About the tax check
You will be able to complete this tax check on GOV.UK through your Government Gateway account. You will 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 will be 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 have completed the tax check you will get a code. You must give this code to your licensing body. The licensing body cannot proceed with your licence application or renewal until the tax check is completed and they have received the code.
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.
What you need to do
If you have not registered to pay tax on earnings from your licensed trade go to GOV.UK to check if you need to register as soon as possible
- if you are an employee find information on Pay As You Earn (PAYE)
- if you are self-employed find information on registering for Self Assessment
- if you operate through a company find information on Corporation Tax
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 is your responsibility to get your tax right but HMRC is here to help.
You can get help from HMRC if you need extra support, for example if you need information in a different format or need help filling in forms. Visit GOV.UK and search ‘Get help from HMRC if you need extra support’.
Further guidance on the tax check is available on GOV.UK
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