Oral Answers to Questions

Debate between Daniel Zeichner and Lucy Frazer

Thursday 13th October 2022 Commons Chamber

[Daniel Zeichner (Cambridge) (Lab)]

3. Whether she has had recent discussions with Cabinet colleagues on the potential impact of VAT levels on private hire operators.

[The Minister of State, Department for Transport (Lucy Frazer)]

I know the hon. Gentleman is a keen champion for this area, given that he is chair of the all-party parliamentary group on taxis. He will know that the question of whether a private hire vehicle operator needs to pay VAT depends on two factors: whether he is acting as principal or as agent; and whether he meets the VAT threshold. As he will also know, His Majesty’s Revenue and Customs is responsible for VAT.

[Daniel Zeichner (Cambridge) (Lab)]

I welcome my near constituency neighbours to their posts. I hope they will get behind a brilliant public transport scheme that Cambridge craves and the country needs Cambridge to have. There are 16,000 private hire operators across the country and an impending court case could change the complicated relationship between customer and operator. The worry is that if that change comes into effect, as a consequence of the court case, many small operators could be at risk. What plans does the Department have to deal with that contingency? Will the Minister agree to meet me and representatives of the industry to discuss that further?

[Lucy Frazer]

I welcome the hon. Member’s championing of a great area in the country in the east of England. I am aware of the litigation that he refers to. His Majesty’s Revenue and Customs is considering any implications that that may have on VAT payable by private hire vehicle operators. As he will know, the Government keep all taxes under review at all times. I am sure that the Minister responsible for this area, Baroness Vere in the other place, will be happy to meet him.