Government on course to consult on VAT implications following ‘Uber v Sefton’ High Court ruling
The Government remains on course to consult on VAT implications for the Private Hire Vehicle (PHV) sector following High Court ruling, confirms Treasury.
In a recent parliamentary inquiry, the Bishop of St Albans raised concerns over the so-called 'taxi tax' and its potential repercussions on rural communities' access to essential services, particularly healthcare. This inquiry prompted a response from Baroness Vere of Norbiton, representing HM Treasury, shedding light on the current VAT treatment of private hire vehicle services and the Government's stance in the wake of a significant High Court decision.
Baroness Vere clarified that there has been no change in the VAT treatment for private hire vehicle services. This statement comes amid growing apprehension within the sector and among the public about the financial and operational impact of the Uber Britannia Ltd v Sefton MBC High Court ruling on the private hire vehicle industry.
The ruling in question has sparked a widespread discussion about its VAT implications, potentially altering the cost dynamics for operators and, consequently, for consumers. In areas where public transport options are limited, and reliance on private hire vehicles is high, any increase in costs could severely hamper residents' ability to access vital services, including medical care.
Acknowledging these concerns, the Government has committed to a consultation process. Announced at the Autumn Statement 2023, this initiative aims to explore the ruling's potential impacts comprehensively. The consultation will provide a platform for stakeholders across the spectrum, from service providers to consumers in rural and urban areas alike, to voice their insights and concerns.
The details of the consultation, including its scope, timeline, and how stakeholders can participate, are yet to be published. The outcome of this process could shape the future regulatory and tax landscape for the private hire vehicle sector, with significant implications for operators, users, and the broader community.
Baroness Vere of Norbiton said: “The VAT treatment of private hire vehicle services has not changed. The Government recognises, however, that the Uber Britannia Ltd v Sefton MBC High Court ruling may have VAT implications for the private hire vehicle sector.
“As announced at Autumn Statement 2023, the Government will consult on the potential impacts of this ruling, and will publish a consultation in due course.”
