TAXING MATTERS
IF YOU ARE A HACKNEY CARRIAGE OR PRIVATE HIRE DRIVER AND YOU DON’T DO A TAX RETURN YOU MUST READ THIS
The Tax Man is set to enforce tax checks on driver relicensing. HM Revenue and Customs says: “Conditionality involves making access to licences or services needed to trade, conditional upon tax registration.”
Yes, you heard it right, from April 2022, in order to transport passengers, drivers will now have to prove that they are willing and ready to pay tax.
It’s called ‘Conditionality’ because: it is a ‘condition’ of being licensed and will be an overnight change to the taxi and private hire industry. If you aren’t registered for tax - you won’t be allowed to relicense.
HMRC says this new law will move people out of the untaxed hidden economy and into the world of compliance. HMRC estimates that the UK has lost billions of tax revenue and is hun- gry to make up some of the loss from our trade. Simple as that.
If you are renewing your licence, you will need a tax check reference number. You can get this by answering some questions set by HMRC. Your licensing body will use this to confirm that you have completed your tax check which allows them to issue a licence.
There are of course some pit falls. THE TRUTH THE WHOLE TRUTH….
HMRC has issued questions that will be part of the condition- ality process. Here’s what we have so far:
So if your answer to these include the statements: “I first got my licence ten years ago”.
“I had no tax status for the work I carried out”. Or
“I did not include income earned using this type of licence in my tax return”.
HMRC will be wondering why anyone would get a licence and then not use it!
There are of course drivers where this is genuinely the case, but for many drivers,
they would leave the trade rather than face what comes 50
WHAT WILL HAPPEN TO YOU?
This is the bit that industry specialist accountants like me are good at, however just so that you know, this is the process that a tax unregistered driver goes through: Compliance check – failure to notify Compliance check – non-filing penalties
These are what we would call enquiries and must be taken seriously. Sounds bad, no? But don’t panic. Even HMRC’s own guidelines say: “You can also ask someone else to deal with us on your behalf, for example, an accountant!”
This is not the right place to share the strategies that we use in these sorts of enquiries. There is a simple rule that any driver can follow to make sure the process has minimal impact.
HMRC is much nicer to deal with if you introduce yourself to it rather than if it must come looking for you.
So, with the right approach and a little forward planning, we can make everything OK. I can’t tell you the number of times a driver leaves our office after going into this process by saying: “it’s like a weight of my shoulders.” It’s all about the appropriate measures for the appropriate problems.
If you are a driver and want to know, more go to:
https://www.eazitax.co.uk/drivers
IF YOU WANT A FREE DRIVER TAX JARGON BUSTER BOOK- LET WITH VITAL INFORMATION FOR EVERY DRIVER GO TO:
https://www.eazitax.co.uk/jargon-buster/ HOW CAN OPERATORS HELP THEIR DRIVERS?
• Build simple tax training into driver onboarding. • Communicate to all your drivers about their tax status. Some will be resistant but choose the right people to communicate the message.
• We can be a helping hand and a listening ear. • Many peoples problem with tax is mostly based in fear. The reality is never as bad.
• If you’d like to know more about conditionality, please go to:
https://www.eazitax.co.uk/conditionality
We are also encouraging every operator to join our Conditionality Operator Partnership at:
https://www.eazitax.co.uk/operators FEBRUARY 2022
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