‘UNEVEN AND CONFUSING PLAYING FIELD’: FREENOW calls for urgent government action after Uber appeal Supreme Court
- Perry Richardson
- Jul 29
- 2 min read
Taxi and private hire operator FREENOW has urged ministers to act swiftly following the Supreme Court’s recent decision that allows PHV operators outside London to continue booking rides as agents.
The ruling maintains a split in the regulatory landscape between London and the rest of England and Wales.
Danny O’Gorman, UK General Manager at FREENOW, warned that the decision “will perpetuate the uneven and confusing playing field in the PHV sector”. While operators in London must act as principals in their contracts with passengers, those outside London can still operate as agents. This distinction carries major tax implications.
O’Gorman pointed to government estimates suggesting that over £1 billion in VAT revenue could be lost annually if the agent model continues unchecked. He said this latest judgment shows that legislative change is now essential.
FREENOW is calling for all PHV operators across the UK to be required to contract as principals. That would ensure all fares are treated similarly for VAT purposes. The firm is also pushing for the removal of the Tour Operators’ Margin Scheme (TOMS) from PHV services, a scheme it argues is being misused to lower VAT liability.
According to O’Gorman, consistent VAT treatment across the sector would support fairer competition and improve clarity for passengers, operators and tax authorities.
The Supreme Court’s judgment focused strictly on the interpretation of the 1976 Act and confirmed that no legal requirement exists for operators outside London to contract as principals. But FREENOW says this legal position now needs to be replaced by a new statutory framework to protect public finances and level the market.
O’Gorman said: “This decision will perpetuate the uneven and confusing playing field in the PHV sector, with operators outside of London booking rides as agents and those within London acting as principals.
“The government’s own analysis estimates that without action, the continuation of the agent model could potentially result in over £1billion being lost to the Exchequer every year.
“The Supreme Court’s ruling highlights the need for urgent government action. Ministers should legislate as soon as possible to ensure all private hire operators are treated as principals, rather than agents, across the UK.
“Additionally, they should then take steps to prohibit the use of the Tour Operators’ Margin Scheme (TOMS) by PHV operators, ensuring the market leaders in the industry are required to pay the same standard rate of VAT as all other players (in their capacity as principals), i.e. at 20%.
“We encourage the government to act now to protect public finances, create fair competition and make the tax system clearer for everyone."
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