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Proposed Reform: UK may impose 20% VAT on private hire journeys in Autumn Budget 2025, aligning with global trends and following HMRC legal defeats on VAT applicability for ride-hailing platforms.
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Current Distinction: Traditional taxis usually remain VAT-exempt due to registration thresholds and regulated fares, while private hire operators like Uber and Bolt may be deemed principals, making them liable for VAT on full fares.
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Potential Impact: Reform would target private hire operators, increasing journey costs and pressuring PHO business models, as VAT liabilities are likely to be absorbed by operators or passed onto passengers.
Source: vatcalc.com
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