Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential impact of the proposed changes to VAT treatment of large private hire vehicle operators from January 2028 on (a) the level of passenger fares and (b) the number of private hire drivers.

At Budget 2026 the Government announced that it will deem the larger operators with annual fare turnover above a certain threshold liable for 20% VAT on the full value of their fares from 2 January 2028.

The government will shortly publish a consultation to confirm the level of annual fare turnover threshold this will apply to.

The measure itself does not place any new VAT obligations on drivers nor does it change existing employment or worker status protections. Decisions about fares, commission rates and commercial arrangements are matters for individual businesses.