How to start a taxi company in the UK: the steps in order

This guide is for anyone who wants to start a taxi business in the UK, whether you're a driver ready to take on other drivers or you're coming in from outside the trade. It puts the steps in the order you'll meet them, names the official body behind each one, and links to a deeper guide for every step. The detail follows the law in England and Wales; London, Scotland and Northern Ireland are covered near the end.

What do you need to start a taxi company in the UK?

You need three kinds of licence before you take a paid booking: an operator licence for the business, a driver licence for every driver and a vehicle licence for every car. GOV.UK says all three must come from the same licensing authority. Around them sit the business itself, insurance, an address to take bookings from and a record of every job.

The Department for Transport counted 19,000 licensed private hire operators in England on 1 April 2026, up from 16,300 in 2024. They're licensed by 263 separate authorities, which is why the rules and the fees change when you cross a council boundary.

Here are the steps at a glance:

Should you run hackney carriages, private hire or both?

Decide this first, because it changes which licences you need. A hackney carriage (a taxi) can wait at a rank or be hailed in the street. A private hire vehicle can only be pre-booked, and the business taking those bookings needs a private hire operator licence. GOV.UK says a firm that only runs hackney carriages needs vehicle and driver licences, but no operator licence.

Hackney numbers can be capped. Bristol City Council limits hackney carriage vehicle licences to 795, and every new Bristol hackney must be wheelchair accessible, an ultra low emission vehicle and painted Bristol Blue. Private hire is more open: section 48 of the Local Government (Miscellaneous Provisions) Act 1976 stops a council refusing a private hire vehicle licence to limit numbers.

You can do both, since GOV.UK notes that taxi drivers can also do work booked by an operator. The full comparison is in hackney carriage vs private hire.

Sole trader or limited company: how should you set up the business?

Choose the structure before you apply, because the operator licence is granted to a named person, partnership or company. If you apply as a company or partnership, the Statutory Taxi and Private Hire Vehicle Standards ask the council to apply the fit and proper test to every director or partner.

As a sole trader you can start trading straight away, but you must register for Self Assessment once you earn more than £1,000 in a tax year. A limited company costs £100 to register online with Companies House. VAT registration becomes compulsory once your taxable turnover passes £90,000, so take the VAT question to an accountant before you set your fares. Start with tax for a taxi business.

Pick a trading name you can keep: Sheffield City Council won't license an operator name that's similar to one already used in Sheffield. The paperwork for each structure is in registering a taxi company.

How much money do you need to start a taxi business?

Licence fees are the smallest part of the bill, and the part you can pin down today. In Bristol, a one-year operator licence costs £356 and each vehicle licence £251 a year. Licensing the business and two cars for the first year comes to £858, before vehicle tests, driver licences, insurance and the cars themselves.

Other councils charge very different amounts. A five-year operator licence for a small firm costs £429 in Cardiff and £2,790 in Manchester, and the full table is in licence fees from UK councils.

Then add vehicles, insurance, wages if you employ controllers, phones, software and marketing. Work them through in what it costs to start a taxi business, then build a taxi business plan that shows how many jobs a week cover your costs.

Where will you take bookings from?

You need an address inside the area of the council that licenses you. Bristol won't issue an operator licence until you give it a physical address within the city boundary. Birmingham's conditions say operators work only from premises within the city, and Liverpool will only approve an operating address inside its own area.

The address doesn't have to be a shop front. Transport for London says an operating centre can be an office, a high street unit or your home, as long as you have planning permission, a certificate of lawful use or written confirmation from the council that you need neither. Liverpool asks for planning permission even when the business runs from home.

Check before you sign a lease. Waiting areas, planning and where records live are covered in private hire operator premises requirements.

How do you get a private hire operator licence?

Apply to the council where you'll take bookings, or to TfL in London, and show that you're a fit and proper person to hold the licence. That test comes from section 55 of the 1976 Act, which also sets the standard licence length at five years, or less if the council thinks fit.

Bristol's list shows what you'll be asked for:

• a basic DBS certificate for each applicant, or each director and the company secretary, no more than two months old
• evidence of your right to work in the UK, if it applies
• a list of the drivers and vehicles you'll operate
• your safeguarding, complaints and training policies
• a completed compliance checklist and its documents

Sheffield also wants insurance certificates, planning consent (or a letter saying you don't need it) and evidence you've paid the data protection fee to the ICO.

Allow time. Bristol tells renewing operators that applications can take up to four weeks, and TfL says a typical London application takes up to 16 weeks. Don't take a booking before the licence arrives: operating a private hire vehicle without one is an offence under section 46 of the 1976 Act. Every document and condition is in how to get a private hire operator licence.

How do you recruit and license drivers?

Every driver needs a driver licence from the same authority that licenses your business and your cars. Under section 51 of the 1976 Act, a council can only grant one to someone who is fit and proper, isn't barred by immigration status and has held a full driving licence for at least 12 months.

Each authority adds its own checks. For a London private hire driver, TfL lists an enhanced DBS check at £56.42, SERU and topographical assessments at £40 each and a medical, on top of a £138 application fee and a £205 grant fee. Bristol charges £69 for its knowledge test.

Decide early whether drivers will be self-employed or employees, because it changes your tax, insurance and wage duties. Read self-employed or employed taxi drivers and driver licence requirements.

Which vehicles can you license?

Any car you license has to pass the council's inspection and meet its vehicle policy. Section 48 of the 1976 Act says the council must be satisfied the car is suitable in type, size and design, safe, comfortable, mechanically sound, unlikely to be mistaken for a hackney carriage, and insured. A private hire vehicle licence lasts no longer than one year.

Read the policy before you buy. Bristol refers new applications for the current Toyota Auris for refusal because its seats are too small. Manchester charges vehicle test fees of £60 a year for cars under three years old, rising to £180 a year for cars eight years and older. Compare models in choosing vehicles for a taxi fleet, and if you'll carry wheelchair users, read wheelchair accessible taxis and the Equality Act.

What insurance does a taxi company need?

You need cover for each car to carry passengers for hire, employers' liability if you employ anyone, and public liability if the public come into your premises.

• The cars. A council can't license a private hire vehicle unless insurance meeting Part VI of the Road Traffic Act 1988 is in force (section 48 of the 1976 Act). Liverpool also makes operators keep live records of each car's insurance expiry date.
• Your staff. GOV.UK says you need employers' liability insurance of at least £5 million as soon as you become an employer, and you can be fined £2,500 for every day you aren't properly insured.
• Your premises. Sheffield asks for public liability insurance of at least £2,000,000 where the public use your premises. Bristol asks for £5,000,000 where there's a public waiting area.

Get quotes before you commit to vehicles. More in taxi business insurance.

How will you take and record bookings?

Decide how bookings come in and where they're written down before launch day, because the law asks for a record of every booking before the journey starts. Section 56 of the 1976 Act puts that duty on the operator, in the form your council sets in its licence conditions.

The Statutory Standards list nine details for each booking, from the passenger's name to who dispatched the car, and suggest keeping records at least six months. Birmingham and Bristol both require 12 months.

A bound book with numbered pages meets Birmingham's conditions, and so does a computerised booking and dispatch system that can print any record on request. Dispatch AI is booking and dispatch software for taxi and private hire firms: it answers your phone, WhatsApp, texts and emails, books the jobs at your prices and sends them to your drivers on your own app. Whatever you choose, check it holds every field in your council's conditions, using the list in operator record keeping or the wider guide to choosing a taxi booking system.

Booking records are personal data. Organisations that use personal information, sole traders included, must pay the ICO a data protection fee unless they're exempt. Since 17 February 2025 it has been £52 on tier 1 and £78 on tier 2.

What do you have to keep doing after you launch?

Your licence comes with conditions, and councils check them. Four come up straight away:

1. Regular lists. Birmingham wants an updated driver and vehicle list on the first of every month. TfL wants a weekly upload every Monday.
2. Reporting. Birmingham gives you 7 days to report a conviction, caution, arrest or change of address.
3. Annual checks. Bristol requires a new basic DBS certificate every year, even on a five-year licence.
4. Renewals. You give the council a tax check code from HMRC, and codes expire after 120 days.

Refusing a booking because a disabled passenger has an assistance dog is an offence under section 170 of the Equality Act 2010. If you pass a job to another firm, section 55A of the 1976 Act sets out who can take it, and you stay responsible: see cross-border hiring and subcontracting and safeguarding for taxi firms.

Is it different in London, Scotland and Northern Ireland?

Yes. Each has its own law and its own licensing body.

Scotland has no English-style operator licence: premises taking bookings for 4 or more taxis or private hire cars need a booking office licence, and 3 or fewer need none. In Northern Ireland, a small operator licence covers up to two taxis. London has its own guide: starting a private hire firm in London.

What is changing in taxi licensing?

Two changes are coming in England, and neither is in force yet. The English Devolution and Community Empowerment Act 2026, law since 29 April 2026, has a chapter on national standards for taxi and private hire licences and a power to suspend licences temporarily. Section 108 kept that chapter out of the parts that started on Royal Assent, so it waits for commencement regulations.

Separately, on 8 January 2026 the Department for Transport opened a 12-week consultation on moving licensing from 263 bodies to 70 local transport authorities and cutting out-of-area working. Start under today's rules, and watch your council's licensing page.