Measure

VAT treatment of private hire vehicles

The measure

As announced in the Autumn Statement 2023, the government will publish a consultation on the impacts of the High Court judgment in Uber Britannia Ltd v Sefton MBC. The government has explained that it is committed to exploring a range of viable options to ensure that this court ruling does not have any undue adverse effects on the private hire vehicle sector and its passengers.

 

Who will be affected?

Private hire vehicle operators and taxi businesses.

 

When will the measure come into effect?

The consultation will be published in April 2024.

Our view

Uber Britannia Ltd v Sefton MBC considered the regulation of Uber’s business model outside of London, including whether the private hire vehicle operator is acting as a principal when entering into a contractual obligation with the passenger to provide the journey. This, in turn, has VAT consequences in terms of whether the private hire vehicle operator is acting as a principal or an agent, and therefore the tax base on which VAT should be charged.