Starting from 2 October 2023 when taxi and private hire drivers in Northern Ireland and Scotland apply for a renewal of their licences, they are now required to prove they have registered correctly with HMRC for tax purposes.
It is essential for drivers to fulfil this obligation to maintain their private hire or taxi licenses and uphold their legal responsibilities.
The rules apply to individuals, any type of partnership and companies.
Starting from October 2, 2023 taxi drivers who wish to renew their taxi driver license (TDL) will need to submit their tax code to the driver and vehicle agency in NI and local authority in Scotland before their application can be approved.
It was declared in 2021 that the same requirement would come into effect in England and Wales in April 2022 so it brings taxi drivers in Northern Ireland and Scotland into line with their counterparts in England and Wales.
More than 120,000 HMRC checks have taken place since it’s introduction in 2021 with the typically simple process normally completed online through your government gateway account.
HMRC make themselves available via phone support if you need them.
It will drag in the region of 8000 drivers in Northern Ireland and around 29,000 drivers in Scotland into the new regime in due course.
HMRC declared that the purpose of the action was to ensure that tax obligations are fulfilled within the sector, and to ensure fairness for the majority of drivers who are already in compliance with their taxes.
It is estimated that the UK government is losing out on £2bn in taxes that are not being paid as part of the hidden economy, money which would otherwise be allocated to important public services that all citizens are reliant on.
Marc Gill, the Director of Individuals and Small Business Compliance with HMRC said:
“The hidden economy is estimated to cost the UK government £2bn in unpaid taxes, which deprives funds for the vital public services we all rely on.”
This new requirement ensures compliance with tax regulations and strengthens the accountability of drivers in the industry.
By conducting these checks, HMRC aims to promote transparency and fairness within the taxi industry ultimately benefiting both drivers and the wider community.
Marc Gill, the Director of Individuals and Small Business Compliance with HMRC, expressed that “the majority of taxi drivers in Northern Ireland are compliant with their taxes, yet the agency is determined to address the few who are not.”
The process will be managed by the DFI in Northern Ireland and local councils in Scotland.
