Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to paragraph 4.6 of the consultation entitled Consultation on the VAT Treatment of Private Hire Vehicles, published on 18 April 2024, how her Department defines average passenger; and how often the average passenger would be expected to use a private hire vehicle in a given period to experience the estimated increase in fares.

There have been a number of court cases in recent years regarding private hire vehicle (PHV) legislation. A consultation seeking views on the potential impact of these court cases on the PHV sector was recently run. Since publishing that consultation, the Court of Appeal has overturned the Uber Britannia Limited v Sefton Borough Council High Court declaration that was handed down in 2023. The Government is currently considering the responses to the consultation, as well as the impact of the recent Court of Appeal judgment and will publish a response in due course.

The expected impact of the original High Court judgments on the average PHV passenger was published in the consultation, and was calculated based on data contained in Table NTS0303 of the National Travel Survey available online here: https://www.gov.uk/government/statistical-data-sets/nts03-modal-comparisons#full-publication-update-history.

It is estimated that around two-thirds of the value of the private hire vehicle market already accounts for VAT as principal. This estimate has been calculated using the estimated size of the sector and data relating to VAT returns and receipts.