Over FORTY FIVE private hire operators sign letter to Chancellor demanding action on ‘Taxi Tax’ VAT threat looming over industry
Over forty-five of the UK’s leading taxi and private hire vehicle (PHV) operators have jointly signed an open letter to the Chancellor, warning of serious consequences if the Government fails to act on the threat of a 20% VAT charge on PHV fares.
The letter, coordinated by Veezu and Bolt, urges the Treasury to deliver urgent clarity following a consultation that closed in August 2024. Since then, the industry says it is still being left in limbo.
At the heart of the issue is the pending Supreme Court case of Uber v Sefton, set to be heard on 2 July 2025. If Uber succeeds, all UK PHV operators may be required to apply VAT to fares. Many operators, particularly smaller ones, say the move could push them out of business.
The operators argue the added 20% charge would hit consumers at a time when affordability is already stretched. Vulnerable groups and those in rural areas would be hit hardest, as PHVs often provide the only dependable transport in those regions. According to Veezu, 43% of all PHV trips are for essential purposes, including healthcare, education and employment.
Operators also say the VAT change would lead to reduced driver earnings, as higher prices dampen demand. With around 265,000 licensed PHV drivers in the UK—many of them self-employed—the industry warns of a significant economic hit to incomes.
Currently, VAT treatment varies across the sector depending on business models and location. The absence of a clear national policy is already causing confusion. Operators say that without a consistent approach, the disparity will worsen.
The group is calling for an urgent meeting with the Treasury to discuss a fair and sustainable solution. They argue that a clear policy would align with the Government’s aim to reduce red tape, support local economies and maintain a transport system fit for growth.
While the Labour Government has prioritised transport improvement as part of its economic strategy, PHV operators say this VAT uncertainty undermines those efforts and risks penalising millions who depend on their services.
Nathan Bowles, CEO of Veezu, said: “The private hire sector is a critical part of the UK’s transport network, providing millions of people with safe, reliable, and affordable journeys. Yet, the uncertainty surrounding VAT on PHV fares is creating unnecessary instability for businesses, drivers, and passengers alike. Without Government intervention on VAT, the sector as we know it may cease to exist, resulting in less competition and choice for passengers. The Government has an opportunity to provide clarity and fairness, ensuring that PHV services remain accessible, affordable and able to sustain the economic growth this industry helps drive.”
What’s in the letter and who has signed it?
The open letter dated 24 March 2025, addressed to the Chancellor, is signed and supported by 52 private hire vehicle (PHV) and taxi operators across the UK. It calls for immediate Government action to prevent the introduction of a 20% VAT charge on PHV fares—a measure operators warn would increase costs, reduce competition, and threaten livelihoods in the sector.
Main Points in the Letter:
Request for Urgent Clarity: Operators are frustrated by nearly two years of silence since the Treasury’s VAT consultation closed in August 2024. They urge the Chancellor to set out next steps and meet with industry leaders.
Opposition to the ‘Taxi Tax’: They warn the VAT change would: Push up fares for passengers, especially those already facing cost-of-living pressures; lower driver earnings by reducing demand; and create inconsistent VAT application across the country, with differences based on geography and business models.
Economic Impact: The signatories argue the move would stall growth in the PHV sector, reduce competition, and undermine services relied on by vulnerable groups and rural communities.
Call to Action: The letter insists that the Government now act without delay and engage with the sector to develop a fair, sustainable VAT framework.
Notable signatories include:
Nathan Bowles, CEO, Veezu Ltd
Emily Dalton, Head of UK Operations, Bolt
Shahzad Ali, Director, 247 Cars Willenhall Ltd
Ian Shanks, MD, Blueline Taxis Newcastle
Phil Hamilton, CEO, Belfast & Newtownabbey Airport Transfers
Lesley Breslin, Director, Brighton Radio Cabs
Simon May, Director, Radio Taxis Southampton
Martin Walker, COO, Star Cars & Coaches Ltd
David Hunter, CEO, Take Me Group
Others represent firms from cities and towns including Leicester, Aberdeen, Wrexham, Warrington, Inverness, Swansea, and High Wycombe. The full list covers firms both large and small, reflecting a broad industry consensus.
