Taxi and private hire car licensing: guidance - third edition

Chapter 7 – licensing of booking offices

7.1 The Civic Government (Scotland) Act 1982 (Licensing of Booking Offices) Order 2009 ("the 2009 Order") requires licensing authorities to licence the use of premises used for the taking of bookings for taxis and private hire cars in the interests of public safety and crime prevention.

7.2 The 2009 Order provides that booking offices (those which take bookings for 4 or more relevant vehicles i.e. taxis or private hire cars licensed under Section 10 of the 1982 Act) must hold a booking office licence issued by the local authority in which area the premises are located.

7.3 The 2009 Order created a new licensable activity under the 1982 Act namely "the use of premises for the carrying on of a business which consists to any extent of the taking of bookings, by any means of communication, from members of the public for the hire of a relevant vehicle". (A relevant vehicle is defined as a vehicle in relation to which a taxi or private hire car licence has been granted in terms of the 1982 Act).

7.4 The 2009 Order prescribes several licensing conditions which authorities are required to attach to the grant or renewal of a booking office licence. These conditions require that a record is kept of all bookings taken and that that record should include the registration number of the vehicle and the name of the driver fulfilling the hire. The licence holder is also required to take all reasonable steps to ensure that any vehicle and driver used to fulfil a hire is appropriately licensed under the 1982 Act.

7.5 The legislation does not set out to be overly prescriptive as to conditions that might be applied to licences. Authorities, however, may in terms of paragraph 5 to Schedule 1 of the 1982 Act attach such other reasonable licensing conditions as they consider appropriate having regard to local circumstances and their own legal advice.

7.6 The 2009 Order applies Part 1 of the 1982 Act (including Schedule 1) with certain modifications. This ensures that licensing authorities will send a copy of any application to the Chief Constable. The result is that those responsible for the operation of booking offices (the licence holder) are subject to police criminal record checks. Local licensing authorities are also required to refuse an application where the applicant is not a fit and proper person to be a holder of the licence. In the case where a licence for that activity is in force or has been applied for the 2009 Order also affords enforcement personnel and police with access to inspect premises and records to check whether the terms of a licence are being complied with. The 2009 Order also, subject to the obtaining of a warrant, provides powers to enforcement personnel and police to enter and search unlicensed premises.

HMRC tax check

7.7 HMRC is introducing a simple tax check from October 2023 that will take place when a person renews their booking office licence. This tax check is also being introduced when a person renews their taxi or private hire car driver licence.

7.8 This will be a small addition to the requirements already put in place by licensing authorities, for example checks to ensure that licensees are fit and proper persons. This will be a straightforward online process, taking a few minutes, typically once every 3 years. The tax check will simply confirm that applicants are registered for tax if they need to be.

7.9 The process will be slightly different depending on whether someone is renewing their licence or applying for the first time. If they are renewing their licence, they'll need a tax check reference number which they can get by submitting their details into the HMRC online service. The licensing authority will use this to confirm with HMRC that the applicant has completed a tax check. The licensing authority will then reach a decision on the licence in the usual way. The HMRC Website contains guidance on the renewal process for applicants, and also guidance on the renewal process for licensing authorities.

7.10 First-time applicants will not have to complete the check. Instead, licensing authorities will make sure they have access to HMRC guidance, showing them what they need to do in order to be properly registered for tax in the future. As decisions on applications for these licences are conditional on the tax check (in addition to the licensing authorities requirements) this is known as 'tax conditionality'. The HMRC Website contains guidance for first-time applicants, and also guidance for licensing authorities on first-time applicants.

HMRC's strategy for tackling the hidden economy

7.11 HMRC is clear the majority in these sectors already pay the tax that is legally due. HMRC is committed to levelling the playing field for compliant businesses so those who meet their tax obligations aren't disadvantaged, or undercut, by those who don't. Tax conditionality is just one element of the HMRC strategy to tackle the hidden economy, which is made up of the minority of individuals and businesses who have sources of taxable income that are entirely hidden from HMRC.

7.12 The most recent tax gap estimates the UK lost around £3.2 billion of tax revenues to the hidden economy in 2020 to 2021 – depriving vital public services of funding. Conditionality is a proportionate and cost-effective way of moving people – some of whom simply don't understand their obligations – out of the hidden economy. It complements existing licensing rules, and recognises that third parties play a vital role in helping people pay the right tax.

Scottish Government – Impact of Modern Technology Consultation

7.13 During the passage of the Air Weapons and Licensing (Scotland) Bill in 2015, concerns were raised about the impact of modern technology such as smartphone apps on the licensing regime for taxis and private hire cars. The then Cabinet Secretary for Justice made a commitment to undertake further work to address these issues.

7.14 The Scottish Government subsequently consulted on the impact of modern technology on the licensing of taxis and private hire cars, and published a Summary of Consultation Responses in late 2019.

7.15 As a consequence of the pandemic work in relation to this consultation was paused. While no commitment or timescale has been made as to what work will be taken forward as a result of the consultation, the responses will inform the development of Scottish Government policy.

7.16 The Scottish Government recognises that legislation in relation to the licensing of booking offices may require to be updated to take account of modern practices, such as the use of app-based bookings.

7.17 Stakeholders can be assured that any future legislative changes that are a made in relation to the licensing of booking offices will be reflected in updated best practice guidance.