The Government has published a policy paper on measures to introduce a new tax check for applications to renew some taxi/PH licences to address parts of the hidden economy. 

The Government said “individuals, partnerships (including limited liability partnerships (LLPs)) and companies applying for licences in England and Wales to either drive taxis or private hire vehicles (PHVs), or both, operate a PHV business” will be impacted by the new rules. 

General description of the measure

Conditionality will introduce a check on tax registration (tax check) for renewed applications in England and Wales for licences to: 

  • drive taxis and
  • operate a PHV business

An applicant who wishes to renew a licence will need to carry out a tax check. The licensing body (typically a local authority) will have to obtain confirmation from HMRC that the applicant has completed the check before being able to consider their renewed licence application. 

Budget 2020 announced that the government will legislate in Finance Bill 2020-21 to make the renewal of licences to drive taxis, drive and operate private hire vehicles (PHVs) (for example minicabs) and deal in scrap metal conditional on applicants completing checks that confirm they are appropriately registered for tax. 

What is being proposed?

Licensing bodies will be required to signpost first-time applicants to HMRC guidance about their potential tax obligations and obtain confirmation that the applicant is aware of the guidance before considering the application. Where the application is not a first-time application (a renewed application) the licensing body must, before considering the application, obtain confirmation from HMRC that the applicant has completed a tax check. 

The technical consultation for hidden economy conditionality will run until 15th September 2020 with changes taking effect in April 2022.

Stephen McCaffrey

Regulatory defence barrister specialising in taxi and private hire licensing law, appeals and defence.

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