UK Taxi and PHV Drivers Face New HMRC Reporting Obligations

Self-Employed Taxi Drivers Face Stricter Tax Scrutiny Under New HMRC Reporting Rules

Self-employed taxi and private hire vehicle (PHV) drivers working through digital platforms such as Uber, Bolt, and Ola are now subject to enhanced tax transparency requirements introduced by HM Revenue and Customs (HMRC). From 1 January 2024, online platforms operating in the UK are legally required to collect and report driver earnings directly to HMRC under new international standards targeting the gig economy.

The rules stem from the OECD’s Model Reporting Rules for Digital Platforms, designed to standardise tax reporting of digital platform income across countries. These changes aim to ensure that individuals earning through online services, particularly in sectors like passenger transport, accurately declare their income and pay the correct taxes. Drivers are now under greater scrutiny to comply with these requirements, with some facing pressure to meet deadlines, as reported in a recent article on the rush to meet HMRC's tax reporting deadline.

As part of the updated framework, platforms must now gather and submit detailed financial and personal information about drivers, including their name, address, National Insurance number, and total annual income. The data also includes any deductions or commissions taken by the platform. The first submissions were made in early 2024, and reporting will continue on an annual basis.

HMRC plans to cross-reference this data with self-assessment tax returns, identifying discrepancies and pursuing unpaid taxes where necessary. The digital platforms must also issue income statements to drivers each year, offering a clear breakdown of earnings. These statements are expected to follow a structure similar to the P60 used for traditional employees.

The new obligations have placed a greater administrative burden on platform operators and drivers alike. Digital service providers must now upgrade their internal systems to comply with the new reporting requirements, while drivers must ensure they keep accurate records and submit timely, consistent tax returns.

An HMRC spokesperson explained:

"The measures are designed to level the playing field between traditional employment and gig economy work while improving overall tax compliance."

Drivers operating across multiple platforms may face particular challenges, as each company will report income separately. HMRC will consolidate data to determine total earnings, making it critical for drivers to maintain up-to-date and accurate financial records.

”This comment implies that the reporting requirements, though meant to improve fairness, may increase the workload for both platforms and drivers.”