Plans to slap a new tax on private hire cars have sparked a backlash from vulnerable Britons who have pleaded with Chancellor Jeremy Hunt to ditch the levy.
The Chancellor has been urged to intervene following a High Court case in late 2023 that ruled taxi companies were liable for VAT rather than their drivers. This rule was then extended to include situations where drivers take payment directly from their customers.
As a result, the so-called ‘Taxi Tax‘ could result in a 20 percent rise in the price of taking a journey by private vehicle. Campaigners have warned the Taxi Tax will negatively affect passengers who rely on these vehicles to go to hospital, see friends, or go shopping.
Overall, they say the average price increase will be around £200 a year. Campaigners have also warned the move will also hurt vulnerable people who rely on taxis to get home safely.
The Daily Express spoke to two women whose lives will be significantly impacted by the 20 percent levy on journeys in private hire vehicles.
Lisa Sefton, 62, is a full-time carer for her mother Davina, 91, who relies on taxis and private vehicles to get to medical appointments and to do basic errands. Currently, she spends as much as £320 per month on fares, but this will increase to £384 with the 20 percent tax added, an extra £64 per month.
Lisa told the Express the new tax will have a “huge impact” because her mother is on a pension and a fixed income which has been stretched by the cost of living crisis and will be strained further by the new tax.
She said: “Everything’s gone up this year, shopping’s gone up and her heating bills. It’s been really cold so the heating’s on a lot of time because she’s not that mobile…so more money on taxes is really going to impact her.”
Lisa says the main impact of the tax will be on Davina’s quality of life as the tax will restrict how often she can see her friends or go to the cinema. Lisa explained: “I’m going to have to reduce how much she goes out.”
She added: “She’s going to be at home more on her own. She lives on her own so it’s very lonely. The leisure activities are the ones that are going to suffer but those are the ones she gets the most pleasure from because that’s when she might be seeing her friends.”
Considering the ramifications of the new tax, Lisa’s message to the Chancellor is clear. She said: “Don’t do it. Think about the pensioners, think about the older people. Think about lots of different groups that it’s going to really impact if you do this. It’s going to make life very difficult for an awful lot of people.”
As well as fearing the consequences for her mother, Lisa is also concerned for the safety of her daughters and women around the UK who could be priced out of one of the few safe ways home. Lisa predicts that parents with young children too “are going to be very very concerned about” the impact of the new tax.
Lisa’s fears are reflected by Anna Baring, 24, who is recovering from a dislocated kneecap, ruptured MPFL (medial patellofemoral ligament), and chipped femur. The London-based professional said that since her injury minicabs have been “essential” and allowed her to live a normal life despite her severe injuries.
Like Lisa and Davina, the Taxi Tax will dramatically bite into her finances and quality of life. “I’m on an entry-level salary and already struggling with the daily cost of living,” says Anna. She added: “A 20% increase in prices would make taxis unaffordable and inaccessible.
“In turn, this would prevent me from being able to go to work, get to the gym to continue with rehab exercises, and see my friends and family. It would prevent me from getting on with my everyday life.”
Anna’s message for the Chancellor is that while cabs are often seen as a luxury they’re actually “a necessity for countless people who depend on them to go about our everyday lives”. She believes that it is “unfair that people who have no other option, and who are already forced to pay over the odds for travel, stand to be charged even more”.
So impactful will the new tax be that Anna may not only lose more financial flexibility but, like Davina and so many others, she will also lose some degree of physical independence.
Conservative MP for Sutton and Cheam Paul Scully has joined calls for the tax to be scrapped. He said: “We need quick, decisive action rather than risk sleepwalking into a seriously harmful tax on families and jobs.
“The taxi tax is not something a Conservative government should be sanctioned, especially in an election year when people and businesses are already struggling with high costs. We need to see action not further delay.”