- PHV services provided by VAT-registered businesses are subject to the standard rate of VAT (20%)
- Businesses in the PHV and taxi sector can choose whether or not to register for and charge VAT if their annual turnover is below the UK VAT threshold
- Larger PHVOs are typically VAT-registered while the majority of PHV drivers are not
- The liability to charge VAT on PHV services lies with the person or business making the supply
- PHVOs can account for VAT as either “agent” or “principal” depending on their business model
- The consultation focuses on the VAT treatment of PHV services and does not include “account work”
- Taxi and PHV policy is devolved in Wales, Scotland, and NI, while the UK Government is responsible for regulation in England
- England is covered by three pieces of legislation for taxi and PHV regulation, with the 1976 Act being the subject of a High Court judgment in 2023.
Source: gov.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
