Tax conditionality: what is it?
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. 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
Anyone operating one of the businesses mentioned will be required to pass a relatively simple tax check. The type depends on whether they’re applying for a licence for the first time or renewing one.
- for a first licence, they won’t need to complete the tax check. Instead they’ll need to confirm to the local authority that they’re registered or will register for tax with HMRC and that they’re aware of their tax obligations
- for renewing or applying for a different licence,they'll have to do a full tax check which can be done online.
Related Topics
-
Selling spare items to your company
You’re short of cash but if you use the traditional methods to take more money out of your company you’ll pay higher rate taxes. Is there another way to extract profits without paying income tax or NI?
-
No such thing as a (tax) free lunch?
You run a small consultancy company and treat your staff to lunch in the office once a week. Your bookkeeper says it’s a taxable benefit in kind because staff lunches are only exempt if they are provided in a workplace canteen. Is this correct?
-
Judge criticises use of fabricated AI-generated cases in HMRC appeal
A tax tribunal judge has criticised the use of apparently fabricated case references generated by artificial intelligence in an appeal against HMRC. The incident highlights growing concerns over the use of AI tools in legal and tax proceedings. What happened?