Taxi drivers in Northern Ireland who want to renew their licenses will have to prove that they are registered with HM Revenue and Customs (HMRC) from October 2023.

The new requirement, which was announced in 2021 and has been implemented in England and Wales since April 2022, aims to “promote tax compliance within the industry and make it fairer for the vast majority of drivers who already pay their taxes correctly”, according to HMRC.

The Department for Infrastructure (DFI) will be responsible for administering the process, which will involve checking the tax status of applicants before issuing or renewing their licenses.

Marc Gill, Director of Individuals and Small Business Compliance, HMRC, said: “While most taxi drivers in Northern Ireland pay their taxes accurately and on time, we want to level the playing field and tackle the small minority who don’t.

“The hidden economy is estimated to cost the UK Government £2bn in unpaid taxes, which deprives funds for the vital public services we all rely on.”

He added that by linking tax compliance to license renewal, the government hoped to encourage drivers to fulfil their tax obligations.

The DFI has not yet commented on the new requirement.