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Cambridge MP calls for ‘PROPER INVESTIGATION’ into the potential impact of VAT payable on PHV rides

Updated: Dec 4, 2022

The MP for Cambridge has urged Government Ministers to discuss the ‘important issue’ of potential changes that could see VAT paid on all private hire vehicle (PHV) journeys.

Daniel Zeichner MP spoke at the House of Commons during a discussion focussing on local transport on 24 November and asked for a ‘proper investigation’ into its potential impact.

The Labour MP directed the statement and question at the Secretary State for Transport, Mark Harper, as the hot industry topic around VAT payable on all future minicab journeys rumbles on.

Private hire operators remain concerned about the implications of an Uber and Sefton Council court case that could drastically impact the sector. The result of the court case could potentially impact 16,000 private hire vehicle operators around England.

If ride-hailing firm Uber are successful, the changes could force contractual arrangements with drivers and make all operators the principal for VAT on fares. This is likely to force the price of journeys up.

Uber have long urged thousands of other private hire operators to follow their lead by making changes to their business models. Earlier this year Uber made big changes which included paying VAT on all UK journeys following a similar court case in London.

Transport for London (TfL), the UK’s biggest licensing authority, warned ALL Private Hire (PH) Operators to take ‘IMMEDIATE ACTION’ to make changes to their terms and conditions and ensure compliance.

If Uber win their court case with Sefton Council, ALL licensing authorities outside of London could then be forced to follow suit.

Zeichner MP said at the House of Commons: “The taxi and private hire sector provides vital services in many parts of the country, but it now faces the prospect of VAT on fares, which could have a damaging effect. I raised the issue at the last Transport questions and sought a meeting with a Minister, but the industry was offered a 10-minute surgery appointment. Can the Secretary of State ask his diary secretary to look at that again?

“This is an important issue that deserves proper investigation.”

Mark Harper replied: “I certainly agree with the Honourable Gentleman about the importance of taxi services for constituents. I will speak to the Under-Secretary of State for Transport, my Honourable Friend Mr Holden, to secure the Honourable Gentleman a longer meeting so that he can discuss it in more detail.”


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