Taxis: VAT
The question
To ask the Chancellor of the Exchequer, whether she plans to bring forward further reforms to VAT treatment within the taxi and private hire vehicle sector.
Answered by Dan Tomlinson
Private hire vehicle (PHV) services provided by VAT-registered businesses are, and always have been, subject to the standard rate of VAT (20%).
The Government’s announcement at Autumn Budget 2025 puts an end to the exploitation of a VAT administration scheme, designed for the tour operator sector, by a small number of large private hire vehicle operators seeking to pay a lower rate of VAT than others.
This won’t affect smaller operators outside London whose drivers contract directly with passengers, or black cabs, neither of which have attempted to exploit this scheme.
Verbatim has judged this answer against the question that was actually asked — answered, partly answered, or evaded. Sign in to see the verdict →