As announced at Autumn Budget 2017, the government is consulting on options for introducing tax registration checks into some licensing processes administered by public-sector bodies.
As announced at Autumn Budget 2017, the government is consulting on options for introducing tax registration checks into some licensing processes administered by public-sector bodies. The term ‘conditionality’ is used to describe measures for tackling the hidden economy which make access to licences in some sectors conditional on tax compliance. The government sees this consultation document as a first step in a longer-term roadmap for developing conditionality.
HMRC published a first consultation on the principles of developing conditionality in August 2016, covering services provided to businesses by private sector providers, such as financial or insurance services and online platforms that link businesses with customers. A response document was published in March 2017.
The consultation suggests a number of specific licensing schemes which could be suitable for these changes, including:
private security;
taxi and private hire vehicles;
waste management;
houses in multiple occupation and selective licensing in the private rental sector;
scrap metal; and
retail and trade.
These have been chosen as sectors the government sees as particularly vulnerable to hidden economy activity and whose existing licence conditions align reasonably well with tax compliance measures. There is also potential to realise broader benefits from driving up wider regulatory standards. The government intends to bring forward draft legislation, which may initially include only a smaller number of the licences listed above, with the possibility of broadening this out further at a later date.
For the purposes of this consultation, being registered for tax includes:
self-assessment for the self-employed or partnerships;
PAYE for employees; or
corporation tax for private limited companies.
The broad approach to developing tax registration checks would involve:
signposting new applicants towards tax obligations and HMRC services;
carrying out checks on applications to renew licences, based on self-declarations and evidence from applicants; and
avoiding the need for licensing authorities to carry out more detailed tax checks.
There would be safeguards to ensure applicants for licences are not required to register earlier than they currently need to under law.
As announced at Autumn Budget 2017, the government is consulting on options for introducing tax registration checks into some licensing processes administered by public-sector bodies.
As announced at Autumn Budget 2017, the government is consulting on options for introducing tax registration checks into some licensing processes administered by public-sector bodies. The term ‘conditionality’ is used to describe measures for tackling the hidden economy which make access to licences in some sectors conditional on tax compliance. The government sees this consultation document as a first step in a longer-term roadmap for developing conditionality.
HMRC published a first consultation on the principles of developing conditionality in August 2016, covering services provided to businesses by private sector providers, such as financial or insurance services and online platforms that link businesses with customers. A response document was published in March 2017.
The consultation suggests a number of specific licensing schemes which could be suitable for these changes, including:
private security;
taxi and private hire vehicles;
waste management;
houses in multiple occupation and selective licensing in the private rental sector;
scrap metal; and
retail and trade.
These have been chosen as sectors the government sees as particularly vulnerable to hidden economy activity and whose existing licence conditions align reasonably well with tax compliance measures. There is also potential to realise broader benefits from driving up wider regulatory standards. The government intends to bring forward draft legislation, which may initially include only a smaller number of the licences listed above, with the possibility of broadening this out further at a later date.
For the purposes of this consultation, being registered for tax includes:
self-assessment for the self-employed or partnerships;
PAYE for employees; or
corporation tax for private limited companies.
The broad approach to developing tax registration checks would involve:
signposting new applicants towards tax obligations and HMRC services;
carrying out checks on applications to renew licences, based on self-declarations and evidence from applicants; and
avoiding the need for licensing authorities to carry out more detailed tax checks.
There would be safeguards to ensure applicants for licences are not required to register earlier than they currently need to under law.
