Taxi drivers and scrap metal merchants are facing a £270million tax crackdown on cash-in-hand work.
They will be vetted by HM Revenue & Customs in a bid to stamp out tax dodging, officials said. Both types of work, along with minicab driving, are licensed activities.
But HMRC will from next year begin conducting ‘tax checks’ before workers can obtain permits. The taxman hopes the new checks will bring in £270million by 2026/2027 by discouraging tax avoidance.
Warning sign: Taxi drivers and scrap metal merchants will be vetted by HM Revenue & Customs in a bid to stamp out tax dodging
HMRC said other workers could face the same rules in the future. The system will come into effect in England and Wales in April next year and in Scotland and Northern Ireland from 2023. It will cover individuals, partnerships and companies.
However, HMRC added that most people in these sectors were ‘tax compliant’. First-time applicants for licences will be pointed to HMRC guidance concerning their tax obligations and will be required to confirm that they are aware of it.
Those applying for a licence renewal will be obliged to provide information allowing HMRC to carry out a tax check. HMRC said: ‘The check will include a question about whether income from the licensed activity has been declared to HMRC.’
Refusal to take part in a tax check will mean the licence will expire.
