William Eichler 06 January 2022

Councils concerned taxis ‘not aware’ of upcoming tax checks

Councils concerned taxis ‘not aware’ of upcoming tax checks image

Local authority leaders are concerned that taxi and private hire vehicle (PHV) operators are ‘not aware’ of forthcoming conditionality tax checks, new research suggests.

Due to come into force in April 2022, conditionality will require all self-employed taxi and PHV drivers to pass a ‘tax check’ to renew their operational licence.

A new study from untied, a personal tax app, has found that over eight in 10 local authorities believe that operators as well as drivers should be preparing in advance of the forthcoming changes.

Almost two thirds (73%) reported that they were not confident that all taxi and PHV operators in their area are aware of these checks.

Less than a quarter (22%) of the surveyed local authorities said that they feel ‘very prepared’ for this change.

Kevin Sefton, CEO of untied, said: ‘With just three months to go until the introduction of conditionality, the clock is quickly ticking down on the time left to prepare for these changes from April 2022. Let’s be in no doubt these are significant changes.

‘It’s a huge undertaking that’s costing HMRC at least £9m. Around 400,000 businesses will be impacted in the first 12 months. Local authorities in England and Wales will have a significant new role recording the outcome of these tax checks on their systems. HMRC estimates it will cost local licensing authorities at least £1.5m to change their systems and processes to cope with these rules.

‘HMRC is already planning for things not going smoothly by introducing special guidelines for what to do if an HMRC failure causes a problem. Other stakeholders need to ensure they have plans in place to help mitigate any problems and untied can help with this – using technology to make the process as streamlined as possible. We have written to HMRC to outline potential issues and we are speaking to local authorities and taxi operators about developing bespoke solutions to limit risk.

‘We know these checks are coming at a tough time for taxi drivers and the industry, but with advance planning and support we hope that local authorities and the industry can quickly integrate these checks into business as usual.’

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