Northern Ireland taxi and PHV industry faces turmoil over VAT shake-up hears Stormont

Taxi and private hire operators in Northern Ireland are raising alarms over proposed VAT status changes that could significantly increase operator fare prices and potentially force many out of business.

The Department for Infrastructure's new proposal, influenced by recent court rulings in England and Wales, suggests changes that could result in a 20% hike in taxi fares.

Stephen Anton of Fonacab, speaking for the Licensed Taxi Operators' Association at a Stormont committee, criticised the lack of local understanding of the proposal’s impact. According to Anton, these changes could lead to higher operational costs and the closure of many taxi businesses, particularly affecting those most dependent on these services.

The proposed regulations could see taxi operators with annual total fares of £90,000 or more required to charge VAT on all bookings. Anton highlighted the burden this places on small operators who might struggle with the administrative demands of VAT compliance. “Any operator with two drivers or above will automatically be pulled into this, affecting the majority of operators in Northern Ireland,” he explained.

Cathy Mallie of Clanrye Taxis in Newry shared her concerns about the local impact, noting the struggle to maintain a sufficient number of drivers, especially in rural areas. "We have lost 50% of our drivers since Covid-19," she disclosed.

Mallie also highlighted the potential existential threat to smaller companies if VAT obligations are enforced, describing the dire financial conditions many are currently facing.

The declining number of active taxi licences, which has halved since 2014, highlights the industry's vulnerability to regulatory changes. Taxi operators and drivers alike are calling for a reconsideration of the proposals.