The Chancellor, Rachel Reeves, is facing a mounting rebellion over plans to introduce a new 20% Value Added Tax on private hire vehicle journeys, a move branded the 'taxi tax' that critics warn will hit the most vulnerable the hardest.
Industry Unites in Opposition
In a powerful show of unity, 59 national and regional taxi and private hire vehicle operators have signed an open letter condemning the proposed tax. The letter is a direct plea to the Labour government to abandon the plan, which is expected to be announced in the Autumn Budget on November 26.
Nathan Bowles, CEO of Veezue, stated that private hire vehicles are a lifeline for many. "PHVs keep Britain moving, connecting communities that rely on us for essential journeys, and a 20 per cent VAT hike would hit the elderly, disabled, and rural passengers hardest," he said.
Vulnerable Communities at Risk
The backlash highlights deep concerns over the social impact of the tax. Michael Solomon Williams from the Campaign for Better Transport told The Telegraph that these vehicles are “an important part of an integrated transport mix, especially for people who live in rural areas, can’t drive or need accessible door-to-door travel.”
Echoing this sentiment, the Stop the Taxi Tax campaign warned the policy would be a breach of Labour’s manifesto promise not to increase VAT. A spokesperson emphasised that the tax would “hit those living in rural communities especially hard, who lack reliable and accessible public transport.”
Economic Uncertainty and the Future
Beyond the immediate cost to passengers, the industry warns of long-term damage. Nathan Bowles added that the ongoing uncertainty is paralysing businesses. "Businesses cannot plan, invest or grow while uncertainty remains, and every month without reassurance contributes to the slow erosion of one of Britain's most essential transport services," he explained.
In response to the growing controversy, a Treasury spokesperson offered a cautious statement: “We take this issue very seriously and recognise its complexity. We are reviewing feedback from our recent consultation and will publish our detailed response shortly.” All eyes are now on the Chancellor's November 26 announcement.
