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VAT treatment of private hire vehicles under consultation

19 April 2024
Issue: 4933 / Categories: News

A consultation on the potential tax impacts of the recent High Court decisions in Uber Britannia Limited v Sefton Borough Council and Uber London Limited v Transport for London on the private hire vehicle (PHV) sector and its passengers has been published. HMRC is inviting views on potential government interventions that could help to mitigate any undue adverse effects on the PHV sector and its passengers.

Two possible options have been identified:

  • Change the legislation that has led to VAT at the standard rate applying to all passenger fares – VATA 1994 could be amended to allow private hire vehicle operators to account for VAT as agents for tax purposes but act as principal for services to passengers.
  • Targeted interventions to help mitigate the impacts of the judgments on consumers – such as applying the reduced or zero rates to relevant services or introducing...

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