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
-
Investing: loans vs shares
You have the opportunity to invest in a promising start-up company. You can either purchase shares or lend it the money. What are the potential tax consequences you need to factor in when making your decision?
-
Are you overlooking company pension contributions?
Having your company top up your pension is one of the most tax-efficient ways to extract profits, yet many owner managers still default to taking a combination of salary and dividends. Are you ready to take your tax planning to the next level?
-
Can officers ignore minor input tax errors?
If your business has claimed input tax on an invoice where the supplier has charged VAT incorrectly, HMRC can disallow your claim by issuing an assessment. Can the officer waive that power to achieve a common sense outcome?