There’s a lack of awareness about the new “tax conditionality” checks which could block some businesses from trading. What do these checks involve and who do they apply to?
Tax conditionality
Since the start of April 2022 businesses in some industry sectors in England and Wales are required to complete a GOV.UK check saying how they pay their tax bills on income from their trade. Failure to do this means they won’t receive a licence to trade from their local authority.
Lack of awareness
According to at least one survey, nearly 30% of local authorities fear that many affected businesses in their area are not aware of the new rules. This is despite online publicity from HMRC and letters sent by local authorities to relevant businesses.
Which businesses?
The licences subject to the new checks are those for:
- taxi drivers
- private hire vehicle drivers and operators
- mobile collector licences for scrap metal dealers
- scrap metal dealers operating from sites.
Checks
If you operate one of the businesses mentioned you’ll be required to pass a relatively simple tax check. The type depends on whether you’re applying for a licence for the first time or renewing one.
- for a first licence, you won’t need to complete the tax check. Instead you’ll need to confirm to your local authority that you’re registered or will register for tax with HMRC and that you’re aware of your tax obligations
- for renewing or applying for a different licence, you’ll have to do a full tax check which can be done online (see The next step ).
Tip. If you’re in one of the trades affected, make sure you know when and how to make the check by referring to HMRC’s guidance.
Since April 2022 taxi drivers, private hire vehicle operators and scrap metal dealers must complete an online tax check when they apply for a licence. Without this they will not be able to obtain or renew a licence to trade.
The next step
HMRC’s guidance on the new checks and how to access them
This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.