Private hire taxi fares across the UK are set for a significant price hike following Chancellor Rachel Reeves' Autumn Budget announcement, which applies a standard 20% Value Added Tax to journeys.
Services including Uber and Bolt will be directly impacted by the new levy, with industry firms warning the change could force fare increases of up to 15% for customers.
The Financial Impact of the New Tax
Dubbed the "taxi tax" by critics, the Treasury has stated the measure is projected to raise approximately £700 million by the 2027-28 financial year.
For the average passenger, this translates to an extra £2 to £3 on a typical £12 journey, adding a substantial new cost to regular travel.
Criticism and Concerns for Vulnerable Users
The policy has faced immediate backlash from MPs and disability advocates. Labour MP for Kingston upon Hull East condemned the move, stating: “It’s the wrong thing to do and would show the Government is completely out of touch. The Chancellor should end the speculation around this immediately and rule out the barmy taxi tax idea.”
Stephen Brookes, Disability Transport Policy Adviser at Disability Rights UK, highlighted the severe impact on disabled communities. “Many of our members, who often have no other viable transport options, are already grappling with soaring living costs,” he said.
He strongly criticised the government, adding: “A move that sidelines disabled people, raising money on the backs of the most vulnerable, is something we condemn. For many disabled people, private hire vehicles are not a luxury, they are essential.”
Additional Road Tax for Electric Vehicles
In a separate transport-related announcement, the Labour government confirmed that electric vehicle drivers will face a new pay-per-mile tax starting in the 2028-29 tax year.
The new charge will be set at 3p per mile and will be in addition to existing road taxes. It is estimated this will cost the average driver an extra £255 per year.
