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Does your business need a licence to operate? Then, be aware. Changes to local government licences are on the way. For some businesses new conditions apply from 4 April 2022.  


What is changing? 

Basically, to continue trading you’ll need a tax check code. It’s necessary when applying for or renewing a licence. Provide the 9-character code to the authority approving your application.  


Who is affected? 

Actually, it’s quite straightforward. No code – no licence. Without the code you won’t be able to obtain a licence. Or renew an existing one. Right now, this rule change impacts specific businesses. Operating a taxi or private hire business? You need to understand the new rules. Scrap metal collection and storage businesses are also affected. 


Applying for a tax check code  

So, how do you do the check? Apply online through HM Revenue & Customs (HMRC) online services. Renewing a licence? Then, you’ll need to confirm key details. These include the original issue date of your licence. Plus the length of your previous licence. Also confirm how you pay tax on your income. 


Changes to local government licences  

Remember, you must carry out the check yourself. Your advisor or agent can’t do it for you. One tax check code is valid for more than one licence application. But, all applications must cover the same type of licence. Applying for several different licences? Then complete a tax check for each one.  


Purpose of the changes 

In general, compliant businesses will welcome these changes. The new rules are intended to tackle the Black Economy. And drive down non-compliance. Of course, licence registration allows a local authority to determine whether a business is registered for tax. What if you don’t file returns? And what’s the position if you file incorrect returns? Basically, it will be harder for you to avoid penalties. Why? Because HMRC will be able to demonstrate that you’re fully aware of your tax responsibilities. 


Only the beginning? 

Currently, the tax code check applies to specific new licence applications and renewals. Yet, this may not remain the case long-term. So, what if these changes to local government licences are deemed a success? In future, there may be a wider roll out.  


Wider implications 

Potentially, licensing will be more strictly controlled. The authorities may grant licences only to people whose tax affairs are in order.  We think other types of business may be affected, too. Do you work in hospitality, for example? Then, stay alert. Businesses involved in food, alcohol and entertainment may have to comply. Ultimately, the new rules may impact any business requiring a licence to trade. 


Further information 

Understandably, some people can’t carry out a tax check online. Don’t worry. Help is at hand. Find out how to complete a tax check online at: