- The UK Chancellor announced the introduction of the “Taxi Tax” in the 2025 Autumn Budget.
- The Tour Operators Margin Scheme (TOMS) VAT loophole, previously used by ride-hailing platforms, will be closed for private hire vehicle operators.
- From January 2, 2026, VAT-registered taxi service providers must apply a 20% VAT rate to the full fare, not just the margin.
- Reduced VAT rates may still apply in limited scenarios, but with stricter conditions.
- This change is expected to impact ride-hailing platforms’ pricing strategies and increase costs for customers.
Source: 1stopvat.com
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.
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