- Taxi fares have been subject to VAT since 1973, contrary to recent press speculation.
- The main issue is determining who is liable to pay VAT: the private hire operator (PHO) or the driver.
- In London, PHOs must act as principals and are liable for VAT on all fares; elsewhere in the UK, PHOs can still act as agents.
- Inconsistent licensing regulations across the UK complicate VAT application and are under government review.
- Ongoing litigation (e.g., Bolt Services UK Ltd v HMRC) is challenging the correct VAT treatment for ride-hailing services.
Source: icaew.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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