Taxi drivers

HMRC to crack down on taxi drivers and taxi drivers with new tax checks ahead of license renewal

Saturday 02 April 2022 20:07

Taxi drivers will be subject to new tax controls from next month

HMRC is launching a crackdown on taxi drivers, mini-taxi drivers and scrap dealers from April, with the introduction of new tax avoidance checks, City AM has reported.

The introduction of a number of new tax avoidance checks will allow HMRC to look more closely at workers in what it considers to be ‘high risk’ sectors of tax avoidance due to the prevalence of working in cash or the widespread use of cash, UHY Hacker Young’s accountants said today.

From April 4, taxi drivers, minicab drivers and scrap dealers will need to confirm to HMRC that they are paying their full taxes in order to renew their licenses with local licensing authorities.

If they have underpaid the tax and lie to HMRC about it, they not only risk losing their business licenses but also possible criminal prosecution.

HMRC’s new “tactic of threatening the livelihoods of those in certain trades is a major shift in the way tax compliance is enforced in the UK,” said Phil Kinzett-Evans, partner at UHY Hacker Young .

“HMRC will be able to block licenses issued to people who have underpaid tax or failed to complete the tax audit.”

Phil Kinzett-Evans, Partner at UHY Hacker Young.

HMRC predicts the new system will prevent £270m of tax avoidance over the next five years.

Kinzett-Evans continued: ‘HMRC has racked up a whole host of new powers over the past decade, but the power to threaten people’s jobs is one of the most daunting.

“This is a major new step in the way HMRC enforces tax compliance. Stopping people from working is something the tax authority should not take lightly,” he concluded.

HMRC response

When approached by AM City Today an HMRC spokesman said the new policy was intended to ‘create a level playing field for the compliant majority in these sectors, so that the majority who play by the rules are not disadvantaged by the minority who don’t. not”.

“We know that people operating in the hidden economy may not be doing it deliberately, many people are doing it because they are unaware or unsure of their tax obligations,” he said. he said, calling the new policy “innovative, cost-effective and a simple way to tackle this part of the tax gap, preventing people from entering the hidden economy.

“We are working with industry bodies to make this as easy as possible. Verification should take a few minutes every few years and is just to confirm whether someone is tax registered or not,” he added.

“If the license applicant is already registered with HMRC if required, this will be a simple online check, taking a few minutes, usually once every three years,” the spokesperson explained.