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In January 2024, HMRC introduced a new reporting requirement that directly affects taxi and private hire vehicle (PHV) drivers operating through digital platforms, including Uber, Bolt, FREE NOW, Ola, and others. These platforms are now legally obligated to report earnings and other personal data of their drivers to HMRC annually.
This development significantly changes how self-employed income in the gig economy is tracked and taxed. Drivers will now face increased scrutiny as new rules aim to enhance transparency, reduce tax evasion, and ensure consistency across the digital workforce.
HMRC’s Reporting Requirements for Platforms
The new rules aim to enhance transparency in digital platform earnings. Platforms like ride-hailing services must report to HMRC the following driver data: full name, address, date of birth, National Insurance or UK tax identification number, total gross income, and fees or commissions deducted.
Platforms are required to submit these reports annually, with the first deadline set for 31 January 2025, covering earnings from the entire 2024 calendar year. In addition to submitting data to HMRC, platforms must also issue a copy of this report to each driver.
What It Means for Drivers
This system helps drivers by reducing the chances of missing or underreporting their income. HMRC will have direct access to their earnings data and can compare this information with self-assessment tax returns. If there are any differences, it could lead to tax investigations, fines, or even legal action in serious cases.
Additionally, platforms may suspend driver accounts if they fail to provide the requested tax information. Some platforms have already started limiting accounts for users who haven’t provided important details, such as a National Insurance number.
Key Dates and Deadlines
- January 2024: Reporting rules go into effect
- 31 January 2025: First digital platform reports due to HMRC for earnings covering January to December 2024
- Ongoing: Annual reporting requirement every year by 31 January for the prior year
Implications for Self-Assessment
Drivers will still need to complete their annual Self-Assessment tax returns. However, the data provided by platforms will act as a second source of truth. If there is a mismatch between what a driver declares and what the platform reports, HMRC will likely follow up.
This means drivers must:
- Keep detailed personal records
- Compare platform-issued summaries with personal income records
- Correctly report income in line with the data platforms submit to HMRC
Those who fail to submit accurate information or delay payment could face penalties, including interest on unpaid tax and possible surcharges for inaccuracies.
Compliance: What Drivers Should Do Now
To stay compliant with the new regime, drivers should take the following steps immediately:
- Update Your Platform Profile: Ensure all required personal information, including your National Insurance number and address, is correctly listed on your driver profile across all platforms.
- Track Your Earnings: Keep a personal log of earnings, expenses, and other relevant tax data throughout the year. This includes fuel costs, vehicle maintenance, insurance, and other business-related expenses.
- Review Year-End Statements: At the end of each tax year, platforms will issue an income statement summarising total earnings and deductions. Review this thoroughly and match it with your records before filing your tax return.
- Reconcile with HMRC Requirements: Compare platform-issued data with your Self-Assessment entries to avoid inconsistencies. If in doubt, consult a tax professional to help reconcile differences.
- Register for Self-Assessment (if not already done): If you earn more than £1,000 in a tax year through self-employment, you must register with HMRC and complete a tax return.
Financial Penalties and Enforcement
Platforms that fail to report required data can face penalties, which escalate if delays continue. Similarly, drivers who fail to comply or submit false information may be liable for fines or interest on unpaid tax.
Penalties include:
- Fines for platforms not registering or reporting on time
- Daily penalties for continuous non-compliance
- Fines per inaccurate or incomplete driver record
- Backdated tax payments and interest for drivers
The aim is not just to collect tax but to ensure uniform compliance across all digital service providers.
The Bigger Picture: Cracking Down on the Hidden Economy
This crackdown is part of a broader strategy by HMRC to address income that previously went unreported in the gig economy. The goal is to increase tax compliance across various industries, including ride-hailing, food delivery, online marketplaces, and freelance services.
For drivers, this signals an era of higher regulation and fewer opportunities to overlook tax obligations. While this may increase the administrative burden, it also creates an environment where honest drivers are not at a disadvantage compared to those who previously underreported earnings.
HMRC’s new digital reporting regime marks a fundamental change in how self-employed income from platforms is monitored and taxed. For taxi and PHV drivers, the days of informal tax reporting are over. Digital platforms now act as intermediaries between drivers and HMRC, and full transparency is no longer optional.
To stay ahead, drivers must understand the rules, track their income, update their profiles, and seek professional advice when necessary. Those who act now will avoid penalties, reduce their stress during tax season, and establish a more sustainable and compliant business model moving forward.