Private Hire Driver Accountant in Cardiff: Checklist for Comparing Quotes and Engagement Letters

The best way to choose a private hire driver accountant in Cardiff is to compare engagement letters, not headline prices. Two quotes of similar size can cover very different work. One may include HMRC letters and Making Tax Digital updates, while the other bills both by the hour.

This guide gives you a scoring checklist for the 2026/27 tax year. It covers what the letter should say, how to check a firm's anti-money laundering (AML) supervision, the red flags HMRC warns about and the Welsh points a Cardiff driver should see reflected. If you have not yet decided whether to hire anyone, start with our ten-step Cardiff hiring guide, then come back here when the quotes arrive.

Key takeaways

• Ask every firm for its engagement letter before you agree a fee, and compare the letters side by side.
• Check four clauses first: scope, fee basis, exclusions and how either side can end the engagement.
• Confirm who supervises the firm for anti-money laundering, and check HMRC's register if the answer is HMRC.
• Walk away from refund promises, fees taken as a share of your refund and any scheme pitched as a way to cut tax.
• Score each private hire driver accountant on the same table, so the cheapest headline price does not win by default.

What is an engagement letter?

An engagement letter is the written agreement between you and your accountant. It sets out which tax years and returns are covered, the fee, what is excluded, what you must provide and how either side can end the arrangement. It is your evidence if a dispute arises.

HMRC's Standard for Agents expects tax advisers to agree terms of engagement before acting, and to make those terms clear and simple. It also expects them to explain how they are paid and how either party can end the arrangement early. The standard applies whether or not the adviser belongs to a professional body.

Why compare engagement letters instead of prices?

Because the price only means something once you know what it buys. A £250 quote that excludes HMRC letters, prior-year corrections and quarterly updates can cost more over two years than a £30 monthly fee that includes them. The engagement letter is the only document that tells you which one you are really buying.

When you pay a private hire driver accountant, the costs that catch people out are rarely the return itself. They are the extras: a compliance check from HMRC, a late-registration fix, a missing year, a VAT question or the move to quarterly reporting. Our checklist puts each of those on the table before you sign.

What should a private hire driver accountant's engagement letter include?

It should name the tax years covered, list every return and service included, state the fee and how it is paid, and spell out what costs extra. It should also say what records you must provide, who approves the return before filing and how either side can end the engagement. Anything missing should be added in writing.

Scope: which years and which returns

Look for the exact tax years. A letter that says "your tax return" without naming the year leaves room for argument. If you are behind, check whether earlier years are included or priced separately. Also check whether the firm will register you for Self Assessment if you are new, because GOV.UK expects that by 5 October after the end of your first trading tax year.

Fee basis: fixed, monthly or hourly

A fixed fee gives you certainty, as long as the scope is clear. A monthly fee spreads the cost and often includes year-round help with bookkeeping. An hourly rate can suit very simple work, but it puts the risk of overruns on you. Whatever the basis, the letter should state the amount, when it is due, whether VAT is added and what triggers a price change.

Exclusions: the clause most drivers skip

Read the exclusions line by line. These are the items we most often see left out of a basic quote for drivers:

• HMRC enquiries and compliance checks, including letters about income your driver app reported to HMRC.
• Making Tax Digital (MTD) for Income Tax quarterly updates and the year-end submission.
• VAT registration, VAT returns or a turnover review against the £90,000 threshold.
• Corrections to earlier years or amendments to a return already filed.
• Second sources of income, such as rental property, employment or another business.
• Your Cardiff Council licence tax check, which an accountant cannot complete for you in any case.

An exclusion is not a problem in itself. The problem is finding out about it in January. If a firm excludes an item you are likely to need, ask for the price in writing now.

Responsibilities: yours and theirs

You remain legally responsible for your own return, even when an accountant files it. The letter should say that the firm will send you a draft and that you must approve it. It should also list what you must provide and by when, so a missed deadline is not quietly blamed on you.

Ending the engagement and getting your records back

Check the notice period, any minimum term and what you pay for work already done. A fair letter also says how your records and working papers will be returned. If you change firms mid-year, our Liverpool FAQ on changing accountant covers the handover in more detail.

How do you check that an accountant is properly supervised?

Ask which body supervises the firm under the Money Laundering Regulations, then check the answer. Accountancy firms must be supervised either by HMRC or by a recognised professional body. If the firm says HMRC, you can search HMRC's published register. If it names a professional body, check the membership with that body directly.

HMRC publishes a Supervised Business Register, updated monthly, which lists businesses HMRC supervises under the Money Laundering Regulations. The register is limited to firms HMRC itself oversees, so an accountant overseen by a professional body will be missing from it for that reason alone. That is why you ask the question first and check second.

Remember that "accountant" is not a protected title in the UK, so anyone can market themselves as a private hire driver accountant. Membership of a professional body brings training, ethics rules, a complaints route and usually a requirement to hold professional indemnity insurance. Ask which body, ask for the membership number and ask whether the firm holds professional indemnity cover.

The 2026 tax adviser registration rules

There is a newer check too. According to HMRC's guidance on when tax advisers must register with HMRC, anyone paid to deal with HMRC about someone else's tax affairs now generally needs to register, with registration windows opening in stages through 2026. Advisers who should register and do not may be unable to act for clients. Ask any firm you are considering to confirm it has an agent services account or has registered.

How will your accountant get access to your HMRC records?

Through a formal agent authorisation, never through your own sign-in details. Your accountant normally sends you an online authorisation request, or uses HMRC's paper form 64-8 for some services. HMRC's Standard for Agents says advisers must never ask clients to share their HMRC sign-in details, so treat that request as a red flag.

Authorisation lets the firm see your Self Assessment record and talk to HMRC for you. It does not move your responsibility for the return onto them. You can still sign in yourself, and our guide to what Cardiff drivers can do in their HMRC online account shows how to check which agents are authorised and remove one you no longer use.

What data will you hand over, and how should it be protected?

Expect to share your Unique Taxpayer Reference (UTR), National Insurance number, driver app earnings statements, bank statements, mileage log, receipts and licence costs. The engagement letter or privacy notice should explain how the firm stores that data, how long it keeps it and who can see it. Ask before you upload anything.

The Standard for Agents expects advisers to keep client information secure and to comply with UK data protection law. In practice, look for a secure upload portal rather than email attachments, and a named person who handles your file. A firm that asks you to send your passport and bank statements over a messaging app is cutting corners.

• Identity documents for the firm's anti-money laundering checks, which a properly supervised firm must carry out.
• Your UTR and National Insurance number.
• Weekly or monthly earnings statements from each driver app or operator you work through.
• Your mileage log and either your vehicle running costs or the details needed for simplified mileage.
• Cardiff Council licence, insurance and vehicle testing receipts.
• Any HMRC letters received in the last two years.

Which red flags should rule a firm out?

Rule out any firm that promises a refund before seeing your records, takes its fee as a share of your refund without explaining it clearly, asks for your HMRC sign-in details, or pitches a scheme to reduce your tax. Also walk away from firms that will not put terms in writing or cannot name their AML supervisor.

• A refund promised in advance. Nobody can know your refund until your income, expenses and payments on account have been checked.
• Fees taken as a percentage of your refund. The Standard for Agents expects advisers to explain clearly how they are paid and any deductions they take from repayments, and you should know who HMRC will pay.
• A request for your Government Gateway or HMRC sign-in details.
• Any arrangement sold as a way to pay less tax through loans, offshore payments or complex structures.
• No written engagement letter, or a letter with no exclusions listed at all.
• Pressure to sign the same day, or to pay a large fee upfront before any work is agreed.

On avoidance, HMRC publishes a current list of named tax avoidance schemes and promoters. It states that HMRC does not approve avoidance schemes and that a scheme's absence from the list does not mean it works. A private hire return rarely needs anything more than accurate income, allowable costs and correct mileage.

What should a Cardiff driver see reflected in the letter?

Your Welsh taxpayer status and your Cardiff Council licence. The firm should record that your main home is in Wales, so Welsh rates of Income Tax apply, and should know that you must complete your own licence tax check. Neither point changes the fee much, but a firm that ignores them may make avoidable errors.

According to GOV.UK's Welsh Income Tax guidance, you pay Welsh rates if you live in Wales, and your main home decides your status. For 2026/27 the page lists a 20% basic rate on taxable income from £12,571 to £50,270, 40% to £125,140 and 45% above that. Those bands currently match England's, but the Welsh Government sets the rates, so check GOV.UK each year.

Cardiff Council licenses private hire drivers and vehicles in the city, and GOV.UK's guide to driver licences for taxis and private hire vehicles explains how council licensing works and points you to your council. We have not quoted council fees here, so check the current forms, requirements and fees with Cardiff Council directly. Your accountant can claim licence costs as business expenses, and our Cardiff 2026 tax return update explains how those costs fit into your return.

Private hire driver accountant scoring table

Score each quote from 0 to 2 on every row, using only what is written in the engagement letter or confirmed by email. A spoken promise scores zero. Any firm that hits a red flag in the last column is out, whatever its total.

How to use the scoring table

1. Ask three private hire driver accountant firms for a written quote and a copy of their engagement letter, giving each the same summary of your income sources and tax years.
2. Highlight the scope, fee, exclusions and termination clauses in each letter before you read anything else.
3. Email each firm the questions the letter leaves open, such as the cost of an HMRC enquiry or MTD quarterly updates.
4. Ask each firm to name its AML supervisor, then check HMRC's register or the professional body.
5. Score every row from 0 to 2, and strike out any firm that triggers a "rules out" answer.
6. Add the likely extras you will need over the next two years to each headline fee.
7. Choose the firm with the best score at a two-year cost you can afford, then sign and authorise it with HMRC.

Illustrative example: three Cardiff quotes compared

This illustrative example uses an invented driver and our own round figures. It is not based on any real person or firm. Ffion drives private hire in Cardiff and lives in the city. Her qualifying income for 2025/26 was £36,000, so under the GOV.UK thresholds she expects to start Making Tax Digital for Income Tax from 6 April 2027.

Ffion asks three firms offering a private hire driver accountant service to quote for her 2026/27 return and the year after. She also knows HMRC wrote to her last year about app income, so she wants enquiry cover priced.

• Firm A: £240 a year for the annual return only. HMRC enquiries at £90 an hour. MTD quarterly updates "quoted separately". AML supervisor named and on HMRC's register.
• Firm B: £28 a month (£336 a year), including MTD quarterly updates and replies to routine HMRC letters. AML supervisor named via a professional body, membership confirmed.
• Firm C: no fee upfront, 25% of any refund. No engagement letter offered until she uploads her records.

Firm C is ruled out straight away: no written terms and a refund-based fee with no explanation of what happens if no refund is due. That leaves Firm A and Firm B.

Over two years, Firm B costs £672. For Firm A, Ffion asks for the MTD price and is quoted £45 a quarter, which is £180 for 2027/28. If one HMRC letter takes three hours, that adds £270. Her two-year estimate for Firm A is £240 plus £240 plus £180 plus £270, or £930.

On the scoring table, Firm A scores 13 and Firm B scores 18. Firm A looked £96 a year cheaper on day one, but on Ffion's own likely needs it costs about £258 more over two years. She picks Firm B and authorises it with HMRC in November, well before the 31 January 2028 deadline for her 2026/27 return.

To estimate your own bill before you speak to anyone, try our tax calculator for drivers. For the MTD timetable in full, read our Making Tax Digital guide for drivers.

What happens with Making Tax Digital and VAT in the quote?

Both should be priced before you need them. MTD for Income Tax adds quarterly updates once your qualifying income passes the threshold, and VAT applies once your taxable turnover passes £90,000. A quote that ignores both is only safe if your income is well below each limit and likely to stay there.

According to GOV.UK's guidance on when you need to use Making Tax Digital for Income Tax, the start date depends on your qualifying income in an earlier tax year: above £50,000 from 6 April 2026, above £30,000 from 6 April 2027 and above £20,000 from 6 April 2028. Many full-time private hire drivers in Cardiff will fall into the 2027 or 2028 groups.

VAT is less common for a single driver, but drivers with high fares or a second business can reach the £90,000 threshold. If you might, ask for a turnover review in the letter. Our guide to VAT for ride-hailing drivers explains how the threshold works.

Common mistakes and what each one triggers

• Signing without reading the exclusions: an HMRC compliance check arrives and you pay hourly rates you never budgeted for.
• Hiring in late January: the firm has no time to check your figures, and if the return misses 31 January HMRC charges late filing penalties, as set out on GOV.UK.
• Sharing your HMRC sign-in details: you lose control of your account, and HMRC's Standard for Agents says advisers must never ask for them.
• Choosing a refund-percentage firm: the incentive is a larger refund, and if expenses are overclaimed you may face tax, interest and penalties after an HMRC check.
• Ignoring MTD: your quarterly updates start without a priced service, and missed submissions can lead to penalties, so check HMRC's current MTD penalty rules on GOV.UK.
• Not updating your main home with HMRC: your tax may be calculated at the wrong rates until it is corrected.

Penalty amounts change and depend on how late or how serious the issue is, so check the current figures on GOV.UK rather than relying on an old quote. If HMRC has already opened a check, our HMRC support service can represent you.

Key terms

• Engagement letter: the written agreement setting out an accountant's scope, fees, exclusions and termination terms.
• AML supervision: oversight of a firm's anti-money laundering controls by HMRC or a recognised professional body.
• Agent authorisation: HMRC's formal permission for an adviser to act for you, given online or on form 64-8.
• Agent services account: the HMRC account a tax adviser uses to access client records.
• UTR: Unique Taxpayer Reference, the 10-digit number HMRC uses for your Self Assessment record.
• MTD: Making Tax Digital for Income Tax, which adds quarterly digital updates for those above the income threshold.
• Welsh rates of Income Tax: the rates set by the Welsh Government for taxpayers whose main home is in Wales.

How UK Driver Accountants helps

We work only with drivers, on fixed fees from £20 a month, and we are independent of any ride-hailing app. Our personal tax service covers Self Assessment for Cardiff private hire drivers, and we set out our scope, fees and exclusions in writing before we start. You can compare our packages on the pricing page.

If you want a private hire driver accountant who will price MTD and HMRC letters upfront, see our Cardiff drivers page. If you are planning a payment rather than a return, our Cardiff guide to paying Self Assessment online covers the reference and the deadlines.

Compare the letter, then sign

Choosing a private hire driver accountant in Cardiff is easier when every quote is judged on the same written terms. Score the scope, fee, exclusions, supervision, HMRC access and exit route, and rule out any red flag. The firm with the best score at a sensible two-year cost is usually the right one.

If you would like us to quote against this checklist, contact our team and we will send our engagement terms for you to score.

Last reviewed 11 November 2026 by the UK Driver Accountants tax team

This article is general information for the 2026/27 tax year and is not personal tax advice. Fees, rules and thresholds can change, so speak to a qualified accountant about your own circumstances. If HMRC opens an enquiry or charges a penalty, we recommend professional representation.