A medical, a DBS check and a full set of licensing papers can all be in order, and a renewal can still stop because a nine-character code is missing.
That code comes from an HMRC tax check. It is easy to mistake it for a tax bill, a council audit, or proof that HMRC has accepted every figure on a return. It is none of those. HMRC describes the check as confirmation that the applicant is registered for tax, if registration is necessary, together with a few questions about how any tax due on income from the licensed trade is paid. The factsheet says the check should take only a few minutes.
The rules have applied in England and Wales since 4 April 2022. They have applied in Scotland and Northern Ireland since 2 October 2023. In England and Wales they cover taxi driver licences, private hire driver licences and private hire vehicle operator licences. In Scotland the operator equivalent named in the guidance is a booking office licence. The same regime also covers some scrap metal licences, but the test for drivers and operators is the same idea: the licensing authority has to know the check has been done.
An individual, a company or any type of partnership can be caught by the rules. Being a limited company, or working in a partnership, does not by itself take someone outside the system.
When The Full Check Is Required
A tax check is required in three situations. The applicant is renewing a licence. The applicant is applying for the same type of licence they already hold with another licensing authority. Or the applicant is applying again for a licence of that type which stopped being valid less than a year before the new application.
A first application is different. Someone who has never held that type of licence, or whose earlier licence of that type stopped being valid a year or more before the application, does not complete the tax check. The licensing body instead asks them to read HMRC guidance on being properly registered for tax and to confirm that they have done so.
Licence type matters. A private hire driver who already holds a driver licence, and who then applies for a private hire vehicle operator licence for the first time, is renewing one activity and starting another. The driver application can require a tax check. The first operator application follows the confirmation route, unless that person has held an operator licence of that type before. Where both applications do need a check, they need separate checks. One code cannot cover different licence types.
The Applicant Has To Do It
HMRC is explicit: the applicant must carry out the tax check. A tax agent or adviser cannot do it for them. An accountant can still help with the underlying records, registration and Self Assessment. The questions in the check itself have to be answered by the licence holder.
A partner applying for a licence on behalf of a partnership completes a tax check for themselves. The licensing authority will say whether any other partners must complete one as well.
The online check uses Government Gateway sign-in details. Anyone who does not already have a Government Gateway account is told to create one before the renewal, not on the day the application is due. The applicant also needs to know when they first got the licence, the length of the most recent licence, and how they pay tax on income from the licensed trade.
Someone who cannot complete the check online is directed to HMRC’s Income Tax general enquiries line if they are an individual, or Corporation Tax general enquiries if they are a company. HMRC also says people who need extra support can complete a tax check by phone through its customer helpline.
What The Council Is Given
At the end of the check, HMRC issues a nine-character code. The applicant gives that code to the licensing authority with the application. The authority uses it to confirm that the check took place. It cannot continue to a grant or refusal until it has a valid code.
The authority does not receive the tax return. HMRC’s factsheet says the licensing body gets confirmation that the check was completed, and does not get access to the applicant’s tax affairs.
The code lasts 120 days. Completing the check months before the papers go in can leave the applicant with an expired code, just as leaving it until the last day can. If a later application is made after the 120 days, a new check is required.
One code can be used for more than one application when every application is for the same type of licence. Taxi driver applications to different authorities are the example HMRC gives. A driver who is also applying for an operator licence needs a separate check, and a separate code, for that other licence type.
If The Code Is Not Supplied
The authority must ask for a code if the application does not include one. If the code is more than 120 days old, it must ask for another. Where no valid code is given, the licence expires on whichever is later: 28 days after the authority asked for the code, or the date the licence itself expires. For temporary licences in Scotland the equivalent waiting period is 7 days, not 28.
That is why the code is an employment issue as well as a tax formality. A driver can be fit, insured and otherwise ready to renew, and still be unable to work once the licence expires, because the application cannot be decided.
Some licences can be extended until a final decision, including a decision on appeal. HMRC lists renewals of a London Hackney Carriage driver licence, and licences issued in Scotland, among those cases. That extension is not described as a general rule for every taxi or private hire licence in England and Wales.
If the online service is down, the applicant should tell the licensing authority at once. The authority will ask them to try again for five days in a row, starting the first time they try after being asked. If they still cannot get in and complete a check during those five days, they do not have to complete one. They tell the authority, and the authority checks that the service really was unavailable before it decides the application.
Before a renewal, the practical order is to identify each licence type in the application, note the expiry date, make sure the Government Gateway sign-in works, and complete the correct check inside the 120-day window. Official steps are here and in the tax check factsheet.