Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if his department will consult on changes to VAT on taxi and private hire fares.

Private hire vehicle (PHV) services provided by VAT-registered businesses are, and always have been, subject to the standard rate of VAT (20%).

At Budget 2025 the Government announced that it would put an end to the use of a VAT administration scheme, designed for the tour operator sector, by a small number of large private hire vehicle operators seeking to pay a lower rate of VAT than others. These changes came into force on 2 January 2026.

This does not affect smaller operators outside London whose drivers contract directly with passengers, or black cabs, neither of which have attempted to make use of this scheme.