Don’t leave registering for self-assessment to the last minute.
Prepare for tax checks.
With only six months to go, time to prepare for tax checks is quickly running out. The government is putting in place new tax requirements for applications to specific licences. This is supported by a new digital service being developed by HMRC. It helps people in the taxi and private hire industries to complete a new tax check.
Most people are registered to pay tax, and this is about ensuring everyone pays the tax they should, thereby creating a level playing field for the compliant majority. HMRC is working with industry bodies to make this as straightforward as possible. The check should take a few minutes every few years and simply confirms that someone is appropriately registered for tax.
You’ll need to complete a tax check when you renew your licence as:
- The driver of a taxi (hackney carriage)
- The driver of a private hire vehicle (and dual licences)
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 due to the 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. There’ll be guidance on GOV.UK and 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 have received the code.
Your licensing body will only receive confirmation from HMRC that you’ve completed the tax check; they will not have access to information about your tax affairs.
Registering for tax
Depending on your circumstances, you may have to pay tax through Pay as You Earn (PAYE), Self Assessment, and/or Corporation Tax.
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 is there to help.
If you’re self-employed: Self Assessment tax returns
If you’re self-employed, you’ll pay Income Tax and National Insurance through Self Assessment, and 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
After reading this post, the most important action you can take is to prepare for tax checks – now.
See more information on how to register as Self Employed in our knowledge base.