Posted on the 5th November 2026 in PHTM News

£1.1 BILLION A YEAR AVAILABLE FROM PRIVATE HIRE VAT, WITH NO NEW TAX RATE

Taxi Law has published research showing that approximately £1.1bn a year could be raised by applying VAT uniformly to private hire fares across the UK.

The report states: "Private hire fares have always been standard rated at 20%. What decides whether a driver charges it is the £90,000 registration threshold, not any exemption. The result is that a London journey carries VAT and an identical journey outside London often does not.

"Fares nationally have risen 10 to 12 per cent to absorb fuel costs following the war. That increase is now in the tariff, so there is room to absorb the VAT charge without a further increase falling on the passenger — if the change is made before the next round of fare revisions.

"Taxi Law proposes commencement on 1 April 2027, which would also end a decade of inconsistency in how the sector is regulated for tax."

This report has been prepared by Taxi Law, a specialist practice in licensing, regulatory and taxmatters affecting the taxi and private hire trades, working both in the United Kingdom and internationally. It examines the value of private hire fares in the United Kingdom across the tax years 2023 to 2025, the VAT position of those fares, and the yield that would arise from applying VAT uniformly across the country from 1 April 2027.

A separate submission making that proposal has been prepared and is available on request.

The report and the proposal are the work of Patrick J. Nolan LLB (HONS), MIL, the firm's principal. Mr Nolan has been involved in the taxi business for twenty years, and has been closely engaged inthe legislative and regulatory questions arising from the entry of ride-hailing platforms into theprivate hire market in the United Kingdom over the past decade.

Much of that work has concerned campaigning for legislative change, both in primary legislation and in the local rules bywhich licensing authorities operate, and in recent years has extended to questions of fiscaladvantage and the tax treatment of the sector.

Mr Nolan is noted across the industry internationally for his work in persuading governments and local authorities to review and restructure their taxi systems, and recently secured the introduction of private hire drivers in the city of Istanbul in Turkey.

Requests for the underlying figures or for the submission referred to above should be directed to pjn@taxilaw.com.tr


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