UBER v SEFTON RULING: Government ‘remains committed’ to consultation on judgment impact to PHV sector

The Government ‘remains committed’ to consult on the impacts of the Uber versus Sefton High court ruling, that could have major implications on VAT liability in the private hire sector moving forwards.

In a recent parliamentary query, Daniel Zeichner MP raised a question regarding the financial treatment of private hire vehicles (PHVs) in the UK, spotlighting the ongoing discussions about the Value Added Tax (VAT) rates applicable to the sector. The inquiry was directed towards the Secretary of State for Transport, probing whether there have been recent dialogues with the Chancellor of the Exchequer regarding the VAT treatment of PHVs and the potential ramifications of VAT rate modifications on the sector's sustainability.

Responding to this inquiry, Guy Opperman from the Department for Transport (DfT) assured that the Government is gearing up to consult on the potential impacts stemming from the notable High Court ruling in the case of Uber Britannia Ltd versus Sefton MBC.

The backdrop of this parliamentary exchange is the concerted effort by private hire operators across England to lobby the Chancellor of the Exchequer, Jeremy Hunt, advocating for a zero-percent VAT status on private hire journeys. This campaign, championed by some of the nation's most prominent PHV firms, aims to secure a favourable tax status that could shield the industry's future and prevent passengers from facing potential fare increases of up to 20%.

The discussions have been prompted by the recent judgment in the Uber versus Sefton Borough Council case, a verdict that has set the stage for new VAT increases. As a result, industry leaders are vocal in their appeal for governmental intervention. They argue that recognising and addressing this issue is imperative to safeguarding the livelihoods of thousands of drivers and averting significant fare hikes for countless passengers.

Guy Opperman, Department for Transport (DfT), said: “The Government remains committed to consult on the potential impacts of the Uber Britannia Ltd v Sefton MBC High Court ruling, and will publish a consultation in due course.”