Taxi Drivers to be tax checked
Updated: Aug 5
In a new effort to catch licensed taxi drivers and PHV drivers who evade tax, the government is implementing a new 'tax check'. The scheme is being made compulsory from 4th of April 2022, and it will make it the responsibility of the regulatory authority to ensure the driver is registered with HMRC for tax. Short and Sons believe this will be completed in the same fashion as the current DBS check, where the driver will pay a fee and use an independent approved online service to verify.
We understand that the driver name will be checked against records with HMRC, but not the amount of tax paid. It should stop people who have failed to register for tax, work cash-only, or use unregistered card devices to process payments. We can see this affecting the semi-retired who work very little, drivers who live abroad or work irregularly, for example, people who use a taxi as a second income.
London Black Cab Licence
It is not yet understood how this will work in London where the London Taxi driver has to complete a rigorous exam which takes 4 years to complete. If the driver has to take time off to look after a relative or goes on an extended holiday (through sickness or a sabbatical), this Tax Check may not allow the cabbie to renew their licence. TFLs' policy on Taxi Drivers' licence renewal who have stopped working for extended periods isn't yet clear. If TFL believes the driver has not been working in central London, they could potentially be stripped the driver of the licence, or they could ask drivers to retake exams.
MTD for Self-Employment in
More changes are on their way in the form of Making Tax Digital. MTD is the name of the governments new reporting standards for tax. MTD for VAT has been in place for a while now, and it is currently due to be implemented to the Self-Employed sector in April 2023. This means every self-employed person will need to complete 5 returns during the year, and an end of year assessment. If it follows the same form as other MTD implementations, the HMRC site will no longer be accessible by the public, and only 3rd party software can be used to send information. If you wish to talk to us, we have low-cost solutions, and we are always up to date with the latest HMRC guidelines.