NEW TAXI TAX ERA: Clock ticking on first annual taxi and private hire driver revenue report heading direct to HMRC
The taxi and private hire vehicle (PHV) industry is on the brink of significant regulatory change as HMRC enforces new tax reporting requirements for operators using digital platforms. The new rules, which focus on increasing transparency and compliance, require detailed annual reports on driver earnings. The first report, covering the 2024 calendar year, must be submitted to HMRC by 31 January 2025.
This shift will affect operators, drivers, and the digital platforms that facilitate the majority of modern taxi and PHV bookings. With the deadline looming, industry stakeholders must prepare for the changes ahead.
Who Is Affected?
The new requirements apply to businesses classified as Reporting Platform Operators (RPOs). This includes companies that use digital systems to manage bookings, dispatch vehicles, and process payments. High-profile operators such as Uber, Bolt, FREENOW, and Gett are among those falling under the new rules, collectively managing more than 100,000 drivers across the UK.
Under the regulations, RPOs must report the income of every driver who uses their platform. Drivers, referred to by HMRC as “Reportable Sellers”, include anyone earning income through these digital platforms, whether working full-time or part-time.
Key Responsibilities for Operators
From 1 January 2024, RPOs will need to collect and maintain detailed information on every driver using their services. This includes personal details such as:
National Insurance number
Full name
Address
Date of birth.
Operators must also ensure the accuracy of income data collected throughout the year. The first report, due on 31 January 2025, will cover the calendar year running from 1 January 2024 to 31 December 2024.
Reports are submitted through an online portal on the gov.uk website. HMRC encourages operators to update the portal regularly, minimising the risk of errors or incomplete submissions. If discrepancies are identified after the report is submitted, RPOs can make corrections even after the deadline, providing some flexibility in addressing mistakes.
What Drivers Need to Know
Drivers using digital platforms will also be impacted. From January 2024, operators will require all registered drivers to provide the necessary personal and tax details. This information will be used to identify drivers and ensure that their income is correctly reported to HMRC.
Whether a driver works full-time or uses the platform occasionally, all earnings generated through these platforms must be accounted for. Drivers are advised to ensure their details are accurate and to cooperate fully with their platform operators to avoid any complications.
Consequences of Non-Compliance
Operators face penalties if they fail to meet the new reporting requirements. Missing the submission deadline, providing incomplete information, or submitting inaccurate data could result in enforcement action from HMRC.
To avoid penalties, operators must establish systems that ensure compliance with the regulations. This includes collecting and verifying driver information, maintaining accurate records of earnings, and adhering to the reporting timeline.
For drivers, failing to provide the necessary information to their operator could lead to delays or errors in their tax reporting, potentially affecting their tax liability.
The Reporting Process
The reporting process itself is said to be straightforward but requires attention to detail. Operators will upload the required data to the HMRC portal, which serves as the main interface for submissions. While the formal report is submitted annually, regular updates throughout the year can help ensure that all data is accurate and ready by the deadline.
The reports must include detailed information on each driver, including their income and any other identifying details required by HMRC.
A New Era of Tax Transparency
The introduction of these rules represents a major shift in how the taxi and PHV industry is regulated from a tax perspective. The emphasis on digital reporting reflects broader efforts by HMRC to modernise tax compliance and reduce the risk of underreported income.
While the new system places additional responsibilities on operators and drivers, it also brings the industry into alignment with other sectors where digital platforms play a central role.
As the deadline for the first submission approaches, operators and drivers must work together to adapt to the new requirements. Proper preparation will be key to ensuring compliance and avoiding penalties.
