Conditionality Step-by-Step
4th April is extremely important for private-hire operators, taxi, and private hire drivers.
Up until now, drivers didn’t t need to be registered for tax to be licensed. But as from the 4th, they have.
Anyone needing a license for public or private hire, companies, self-employed, employed, taxpayers and non-taxpayers will have to make a declaration which will give them a tax check code which will be THE ONLY way to complete their relicensing procedure.
Enough about the concept and arguments for and against, just for you I will share the simple methodology of getting it done.
Completing your Conditionality Tax Check
Here is a step-by-step guide of how to complete your HMRC online tax check.
What you need to know:
- Your Government Gateway User ID and Password
- The date of when you first got your license
- The length of your most recent license
- How you pay tax on the income you earn from your licensed trade
Step 1. Signing into Government Gateway
To retrieve your tax check reference number, you’ll need to login to Government Gateway on the Gov.uk website. If you’ve forgotten your user ID or password, you can retrieve these at the ‘Problems signing in’ section.
Step 2. Visit the tax check screen
Follow the link on screen now to retrieve your tax check reference number,
- Select the type of license you are applying for,
- Select how many years ago you first got a license,
- Select how long your most recent license is valid for
- Select what your tax status was for licensed work done between April 2019 and 5 April 2020,
- Select if you included income earned in the previous question in your tax return for tax year 2019-2020
- One last opportunity to check your answers
- Then your tax check number magically appears on the screen.
- Copy or write down your tax check code as you will need it for your Local authority license check.
Step 3. Visit your licensing authority renewal page
Next, visit your licensing authorities license application page, depending on your council this may be an online form or a document to download. On the section for tax check number, insert the number you copied in step 2.
Submit this form or send to your licensing authority to complete your application.
Your tax check should now be complete! If your tax code is incorrect or void your licensing authority will notify you.
Step 4. Sorted, go earn a living.
We have produced a step-by-step video on our Youtube channel that you can also follow.
Making Tax Digital Update
VAT:
MTD VAT is being offered to all businesses voluntarily registered for VAT for their first VAT return period starting on or after this April 2022.
HMRC has reported that around 100,000 businesses that should already be complying with MTD VAT have still to sign up. HMRC recently sent out a chase letter. It has the data on who isn’t filling out their VAT using the correct method and wants as many businesses as possible to be ready to go fully digital.
Alongside HMRC’s new record-keeping and MTD filing requirements for VAT, there is also a new set of late filing and late payment penalty rules. The penalties now work around filing obligation dates, imposing penalty points for when a business misses a filing obligation date.
Points don’t mean prizes, they mean fines. But good behaviour can go some way to getting rid of points over time.
Self-Assessment Tax Returns:
Unlike MTD VAT, the start date for MTD for self-assessment is in secondary legislation. Following a consultation published late last year, the start date is almost certainly 6 April 2023. It will apply to unincorporated businesses with total business income above £10,000 per year.
Quarterly reports are going to mean a much better bookkeeping system even for sole traders like drivers.
The first accounting periods affected by MTD for self-assessment will be those beginning on or after 6 April 2023. Many in our trade are just not prepared. Anyone that isn’t doing their bookkeeping digitally will have a struggle. In many ways, the message about MTD has been lost during the pandemic, but it will be on us soon enough.
In conclusion as a trade, in truth, we are as ready as our accountants are. We are making sure that even the most techno terrified of our clients can use our software, make sure your accountants are investing in your training now.
Click here to view more about Making Tax Digital.
This article was originally written for the April 2022 edition of ‘Professional Driver Magazine’.
