The tax authorities have suspicions that thousands of private hirer operators using mobile apps like UBER, OLA and BOLT are not declaring their income . New registration requirements have exposed what HMRC suspect is a large scale uncovering of unpaid tax amount drivers which operate through an online app.
HMRC are about to write to 4,000 drivers who are booked via online apps. In April the Government made it an additional requirement when seeking licence renewal applications was to carry out tax checks. All private hirer drivers have to undertake these checks every three years. Private hirer drivers who have previously failed to declare their income and therefore failed to pay their taxes are now being discovered as they attempt to renew their licences as they are unable to produce an HMRC code.
Many of these drivers operate via ride-sharing app Uber and or have not being paying the correct amount of tax. The general secretary at the Licenced Taxi Drivers Association believes there are tens of thousands more over as more renew their licence over the next two years. HMRC are missing out on 100,000’s of points in income as there are c 100,000 private hire drivers in London along. Uber has stated that their drivers are self employed for tax purposes so it can not check which drivers have completed tax returns. This is simply is not true as a compliance process can be introduced to ensure all taxi drivers are registered for tax and are completing tax returns each year. Pendragon Comply helps similar clients paying self employed individuals to safe guard their tax liability by introducing and operating a process for this exact issue.
This does not affect the c22,000 black cab drivers. For those agreeing to make a voluntary disclosure the tax authorities will send an acknowledgment letter offering the drivers 90 days to work out and pay the tax owed, others will be subject to tax penalties and shorter demands no doubt.
Uber’s comment is interesting in not least because in February 2021 they lost a case at the Supreme Court landmark judgement where Uber drivers are deemed to be workers and not independent contractors ( self-employed) and therefore entitled to holiday pay , pension contributions and national minimum wage.
If you have similar concerns as related to this article or are unsure whether you have correctly classified the status of the workers you pay, please get in touch for a confidential discussion.