Tax Conditionality Checks

From 04 April 2022 it will be a requirement that licensing authorities in England and Wales carry out checks to confirm applicants for some licences are aware of their tax responsibilities and/or have completed a tax check with HM Revenue and Customs (HMRC). We have outlined below what the new requirements are, how you may be affected and what you should do to prepare for the changes.

Will the Changes affect you?

The changes are to be introduced for any applicant who submits an application on or after 04 April 2022 for the following licences:

  • Hackney Carriage and/or Private Hire Vehicle Drivers Licence
  • Private Hire Operators Licence
  • Scrap Metal Dealers Licence

How will the changes affect you?

If you are applying for a licence for the first time you will not need to complete a tax check. However, you will be expected to confirm that you have read and understood the HMRC guidance on what you need to do to be properly registered for tax.

If you currently hold a licence or have held a licence which expired within the last year, with this or any other authority, you will be required to carry out a tax check at the time of your next application.

Do I need to do anything to prepare for a tax check before 04 April 2022?

If you are a current licence holder it is recommended that you take the following steps to prepare for the changes which come into effect on 04 April 2022:

  • ensure you fully understand your tax responsibilities and are registered with HMRC to pay the appropriate tax;
  • check your HMRC records are up to date; and
  • register for HMRC’s online services and get a Government Gateway user ID and password.

Guidance on your tax responsibilities, how you can prepare for the new checks and the relevant registration links can be found using the following links:

How do I complete a tax check?

From 07 March 2022 you will be able to complete the tax check using HMRC’s online service, provided you have completed the preparatory steps outlined under ‘Do I need to do anything to prepare for a tax check before 04 April 2022?’
The check should only take a few minutes to complete.

Complete a tax check for a taxi, private hire or scrap metal licence.

Once you have completed the online check you will be given a check code to supply to the licensing authority when you make your application. The tax check code will be valid for 120 days from the date it is generated.

Will the local authority have access to my tax records?

The authority will not have access to your personal tax records by completing this check. When the authority receives your check code we will use the code to confirm that you have completed a tax check with HMRC. This process simply provides the authority with confirmation that you have satisfactorily completed a tax check with HMRC and we can proceed with your application.

If I have more than one licence can I use the same check code for each application?

You can use the same check code for applications for the same licence type, however, you cannot use the same check code for different licence types. For example, you can use the same check code for two driver applications but you cannot use the same check code for both a driver application and an operator application.

Do I need to do a tax check before my renewal is due?

No, a tax check is only due at the time of an application. If you are a current licence holder you will not be expected to carry out a tax check until you renew your licence. However, we do recommend you take the steps outlined in ‘Do I need to do anything to prepare for a tax check before 04 April 2022?’ as soon as possible to ensure you are prepared for when your renewal falls due.

What happens if I cannot get a tax check?

If you are unable to obtain a tax check you will need to contact HMRC for further guidance on how you should proceed. In most cases the authority will not be able to process your application without confirming a tax check has been completed. If you can provide evidence that you have been prevented from obtaining a tax check after making reasonable efforts to obtain one, we may be able to process your application without a tax check.

In these circumstances you should contact the licensing authority as soon as possible to discuss the matter.

Full details of your tax responsibilities and information about the tax checks can be found via the Tax check factsheet.

For further assistance please contact the Licensing Team on 01246 217884 or 01246 217885.