Start a taxi or private hire business

A taxi can be hailed in the street or hired at a rank. A private hire vehicle must be pre-booked. Driving is also different from taking bookings, because taking private hire bookings needs an operator licence. Settle this first, because it decides which licences you apply for and how you work with any drivers.

An owner-driver can usually trade as a sole trader. A firm that will employ staff or take on drivers may prefer a limited company. Settle this before you register with HMRC, because it affects your tax, your liability and your paperwork.

Your council licenses the driver, the vehicle and any private hire operator in separate applications. Put hire and reward insurance in place before you apply for the vehicle licence, because the council checks your certificate. London, Scotland and Northern Ireland have their own licensing bodies.

Hire and reward cover is the insurance for carrying paying passengers. The legal minimum is cover for your liability for death or injury to others, passengers included, and for damage to their property. Cover for damage to your own vehicle is not automatic, so ask your insurer. Other cover protects the business. The motor cover in the general insurance guide is not taxi cover, so take the hire and reward detail from step 3. Employers' liability insurance applies once you employ anyone, including office or dispatch staff.

Duties to disabled passengers apply from your first fare, including people with assistance dogs and, if your vehicle is designated, wheelchair users. What you can charge depends on your vehicle type. If you take bookings, brief everyone who answers the phone.

Vehicle costs make up much of an owner-driver's expenses, and cash takings need records. Check your turnover against the VAT registration threshold once you are trading.

Step 7 (optional): Take on drivers and staff

Come back to this step if you run drivers or office staff. Decide whether each driver is an employee, a worker or self-employed, because status decides your tax and employment duties. You will also hold passenger names, addresses and booking records, which brings data protection duties.

Work through the checklist before you carry your first fare, and again when you add a vehicle, a driver or a booking service. Use section 1 for the shared workplace duties and the taxi and private hire section for your licences. The safe operation guide covers health and safety, accident reporting, equality and data protection.