Tax check – sample article/blog post
Updated 22 May 2023
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From 2 October 2023 the government will put in place new tax requirements for applications for certain licences across Scotland and Northern Ireland. You will need to complete a tax check with HMRC before you apply to renew your licence.
In Scotland this applies to drivers of taxis and private hire cars, booking offices and to metal dealers. In Northern Ireland this will apply to licences to drive taxis.
These reforms were implemented in England and Wales from April 2022 and this change is about levelling the playing field for the compliant majority, ensuring everyone pays the tax they should. HMRC is continuing to work with industry bodies to ensure the change is as straightforward as possible for everyone. The check should take a few minutes every few years and is simply to confirm that someone is appropriately registered for tax.
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 and there is guidance on GOV.UK to help you complete the check. Anyone who needs extra support will be able to complete the tax check by phone through HMRC’s customer helpline.
When you’ve completed the tax check, you’ll 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’ve received the code.
Your licensing body will use the code to confirm you have completed the tax check with HMRC. They won’t have access to information about your tax affairs.
Registering for tax
You may have to pay tax through Pay as You Earn (PAYE), Self Assessment and/or Corporation Tax, depending on your circumstances. 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’s your responsibility to get your tax right, but HMRC are here to help.
If you’re an employee: Pay As You Earn (PAYE)
Most employed people pay Income Tax through PAYE. This is the system employers use to take Income Tax and National Insurance contributions before they pay wages.
See more information on PAYE.
If you’re self-employed: Self Assessment tax returns
If you’re responsible for your own tax affairs, you’ll pay Income Tax and National Insurance through Self Assessment. You’ll need to fill in a tax return every year.
You must send a tax return if, in the last tax year (6 April to 5 April), you were:
- self-employed as a ‘sole trader’ and your annual gross trading income was more than £1,000
- a partner in a business partnership
See more information on registering for Self Assessment.
If you operate through a company: Corporation Tax
Companies need to register for Corporation Tax when they start doing business or restart a dormant business.
See more information on Corporation Tax.