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The government has published a policy paper, 'New tax checks on licence renewal applications', proposed for inclusion in Finance Act 2021. The new measure will require individuals and businesses applying to renew licences to drive taxis and private hire vehicles (PHV), operate a PHV business or deal in scrap metal in England and Wales to confirm their tax history with HMRC before their renewal application can be processed.   

The categories of licences that will be subject to conditionality are issued under:

HMRC is developing a simple online service for renewal applicants and licensing bodies to use.

Regarding first time applicants, there will be a requirement for licensing bodies to direct them to HMRC guidance on their tax obligations and obtain confirmation that the applicant is aware of the guidance before they consider the licence application.

The government is considering rolling out the reform to Scotland and Northern Ireland and intends to consult on extending conditionality to other sectors in due course. Based on the consultations to date, an extension of conditionality could potentially affect the business services sectors e.g. insurance, bank accounts, rental or premises, loans, accounts with suppliers or utilities.

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Consultations: tackling the hidden economy
HMRC have launched three consultations on ‘Tackling the hidden economy’ proposing tougher sanctions, conditionality and the extension of data-gathering powers.

New tax checks on licence renewal applications