6. Tax and self-assessment
When you apply to be a Hackney Carriage Driver, Private Hire Driver or Private Hire Operator you must confirm that you are aware of your responsibilities with regard to income and tax. As an authority we are also required by HMRC to carry out annual tax checks on existing drivers and those drivers who have been self employed before working in East Devon.
Taxi drivers can work either as an employee for someone else, or on a self-employed basis. You are an employee if you receive a regular salary or hourly rate paid to you by an employer through a PAYE scheme, whereby your tax and National Insurance (NI) is assessed and deducted at source.
If you own your own business or work on a self employed basis (for example as a contractor) for another business, and tax and NI is not deducted before payments for your work are made to you, then you are deemed to be Self Employed and need to manage your own tax affairs direct with HMRC. In this case you will have to tell HMRC and register for tax and self assessment so that you pay any tax that may be due on income you earn from your licensed trade.
If you are new to this, visit the Gov.uk website for more information on your responsibilities with regard to tax and self assessment. You may also wish to consult with an accountant. It is important that you understand what you must do with regard to tax and self assessment, and you will be required to confirm that you are aware of your tax responsibilities on any first time taxi application form. Thereafter, as part of your annual renewal you will be required to obtain a tax check code, so that we may verify you are registered with HMRC.