MP questions VAT impacts on PHV sector amid court ruling and consultation release

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In recent parliamentary discussions, Ben Bradley, Conservative MP for Mansfield, raised important queries concerning the VAT treatment for private hire vehicle operators.

Bradley’s inquiries to the Chancellor of the Exchequer sought clarity on whether an evaluation would be conducted on the effects of varying VAT rates within the industry. This examination aims to determine the potential repercussions on market competition following a notable High Court decision in July 2023.

Bradley also probed the potential financial implications of applying a 20% VAT rate on private hire vehicle journeys and its effect on revenue generated for HM Treasury.

In response, Nigel Huddleston, Financial Secretary to the Treasury, outlined the Government’s proactive steps. He highlighted that a consultation has been launched to scrutinise the impacts of the High Court's decision on the private hire vehicle (PHV) sector, including operators, drivers, and passengers. This consultation will consider a variety of strategies to alleviate any negative outcomes resulting from the court's ruling.

The development marks a critical juncture for the private hire vehicle sector, with government actions closely watched by industry stakeholders.

Nigel Huddleston, the Financial Secretary to the Treasury, said: “The Government has published a consultation on the potential impacts of this court judgment on the PHV sector and its passengers. This consultation explores range of potential options to help mitigate any potential adverse effects that the court judgment could have on PHVOs, drivers, and passengers.”