PARLIAMENTARY WRITTEN QUESTION
(28 August 2026)
Question Asked
To ask the Chancellor of the Exchequer, if his department will consult on changes to VAT on taxi and private hire fares.
Asked by:
Mr Richard Holden (Conservative)
Asked by:
Mr Richard Holden (Conservative)
Answer
Private hire vehicle (PHV) services provided by VAT-registered businesses are, and always have been, subject to the standard rate of VAT (20%).
At Budget 2025 the Government announced that it would put an end to the use 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. These changes came into force on 2 January 2026.
This does not affect smaller operators outside London whose drivers contract directly with passengers, or black cabs, neither of which have attempted to make use of this scheme.
Answered by:
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