PHV campaign for 0% VAT rate on fares stalls with just over 100 signatures in first week

A campaign seeking a 0% VAT status for private hire vehicle (PHV) journeys appears to be losing momentum. The initiative, known as 'Stop the Taxi Tax', has so far garnered a modest response, with just over 100 signatures in its first week.

The campaign, aimed at PHV operators such as minicabs, ridehails, and chauffeurs, contrasts with the traditional taxi drivers or Hackney Carriages. The crux of the issue lies in a VAT imposition which could escalate up to 20%, a move that ridehail giants like Uber and Bolt are vigorously contesting, seeking a lesser marginal rate.

The urgency of the situation stems from a landmark ruling in an Uber case, mandating a 20% VAT on private hire fares. This decision transfers the VAT burden from individual drivers to the operators themselves. The implications could be significant, with potential repercussions on drivers' profit margins and passenger fares.

In an effort to rally public support, campaign lobbyists launched a petition on the 38Degrees platform over a week ago. However, as of 26 January 2024, the petition had only secured 123 signatures. The petition hopes to gather support from an industry that has over 200,000 PHV drivers working nationwide allegedly concerned about the effects this tax could have on the industry.

The campaign is pressing the Government for prompt intervention, especially given the upcoming consultation slated for early 2024. There is a growing concern that any delay in this process could exacerbate the uncertainty and apprehension within the PHV sectors. The petitioners are calling for the consultation's timely release to allow for decisive action in the upcoming Spring Statement in March.

Echoing these sentiments, Paul Scully MP was quoted in the Express saying: “We need quick, decisive action rather than risk sleepwalking into a seriously harmful tax on families and jobs.”