HM Revenue & Customs says thousands of taxi drivers, using apps such as Uber, Ola and Bolt, will soon face a tax bill.
According to HMRC, an estimated 4,000 taxi drivers are not declaring their income correctly. The private hire motorists are being investigated for unpaid tax following new registration requirements uncovering undeclared income through online apps.
Earlier this year, the Government brought in new rules for private hire drivers. Cabbies are now required to have in-depth checks for licence renewals, which is required every three years.
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Speaking to the Financial Times, Steve McNamara, general secretary at the Licensed Taxi Drivers Association (LTDA), said cabbies who previously failed to correctly pay or declare their taxes are being found out. This is because they cannot renew their licence without a HMRC code, reports BirminghamLive.
Mr McNamara said: "The Revenue has been missing out on tens of thousands [of pounds] of income for years." Uber has said it will fully comply with HMRC's investigation and hand over all possible information, however the taxi giant argues as drivers are 'self-employed', its powers are limited.
This is despite a historic court ruling in February 2021, which said Uber cabbies are in fact workers and not independent contractors. As a result, drivers are now entitled to pension contributions and holiday pay.
HMRC will send out letters to those who may have underpaid tax or failed to declare income correctly from September 5 until the end of the year. Individuals will have 30 days to respond or face the prospect of fines and a fuller investigation into their financial affairs.
If drivers believe they may have not filled out their tax returns properly, they can make a voluntary submission. In return, HMRC will send an acknowledgment letter, offering them 90 days to pay the tax owed.
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