Supreme Court ruling hailed as ‘MONUMENTAL DECISION’ for future of private hire sector as VAT threat blocked
- Perry Richardson
- Jul 31
- 2 min read
Legal representatives hailed a recent Supreme Court judgment as a ‘monumental decision’ for private hire firms across England and Wales after the Supreme Court ruled against a legal move that could have led to a blanket VAT charge on fares.
The judgment comes after Uber sought a declaration that would have effectively outlawed business models where operators act as agents, a setup that avoids VAT liability. If successful, the move would have seen fares rise by over 20% for passengers nationwide, including those most reliant on affordable taxi travel.
Liverpool-based DELTA Taxis led the legal challenge, supported by legal firm Aaron and Partners. The case hinged on the interpretation of licensing laws dating back to 1976, which DELTA argued allow for different models to coexist within the regulatory system. The Supreme Court agreed, confirming that operators are not required to contract directly with passengers and therefore do not all fall within the scope of VAT.
Layla Barke-Jones, Dispute Resolution Partner at Aaron and Partners, who represented DELTA, welcomed the judgment. Barke-Jones said: “This is a monumental decision, not just for DELTA, but for all private hire taxi drivers and operators across England and Wales. Had this gone the other way, the cost and complexity of implementing VAT systems would have pushed many firms to the brink.
“This ruling ensures that operators can continue to operate under established, regulated models that have been in existence since regulation was introduced almost half a century ago– such as the agency model without being forced into a ‘one size fits all’ model.
“Private hire firms are vital in the communities, and are used frequently by those with disabilities, low-income households and older people who rely on taxis for essential journeys and to maintain their independence.
“If VAT suddenly had to be paid by all those people, the additional cost would have meant many simply choose not to travel at all, leaving some of the most vulnerable people in our society isolated.
“A crisis has been averted. This ruling protects the freedom to operate and the right of communities to access affordable, reliable transport.”
Paul McLaughlin, a Delta Taxis spokesman, said: “We are thrilled with the result and extend our gratitude to our legal team in achieving it. We were never under any illusions as to the mountain we’d have to climb when Uber set about trying to destroy the agency model Delta has so successfully administered on Merseyside from as far back as 1968.
“This ruling draws a line under a long-running dispute and we’re incredibly proud to have played our part in defending the private hire taxi industry and protecting a British institution and our passengers.”
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