Commons Sense

House of Commons · Ministers' Questions

Private Hire Operators: VAT

Thursday 13 October 2022 · 2 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 2 Not answered 0

Key points

  • Daniel Zeichner asked the Minister about discussions with Cabinet colleagues on the impact of VAT levels on private hire operators.
  • The Minister acknowledged Daniel Zeichner's work as chair of the all-party parliamentary group on taxis.
  • HMRC is considering the implications of ongoing litigation on VAT payable by private hire vehicle operators.

Topics (select to filter)

Questions & Answers

Q1 Daniel Zeichner Lab Cambridge
Taxation Transport
Context

The question arises from the need to understand VAT implications for private hire vehicle operators in light of their role as principal or agent and whether they meet the VAT threshold. The context includes concerns about a court case potentially altering relationships between customers and operators, risking many small operators.

Question

Whether she has had recent discussions with Cabinet colleagues on the potential impact of VAT levels on private hire operators. I welcome my near constituency neighbours to their posts. I hope they will get behind a brilliant public transport scheme that Cambridge craves and the country needs Cambridge to have. There are 16,000 private hire operators across the country and an impending court case could change the complicated relationship between customer and operator. The worry is that if that change comes into effect, as a consequence of the court case, many small operators could be at risk.

Answer from Lucy Frazer

I welcome the hon. Member's championing of a great area in the country in the east of England. I am aware of the litigation that he refers to. His Majesty's Revenue and Customs is considering any implications that that may have on VAT payable by private hire vehicle operators. As he will know, the Government keep all taxes under review at all times. I am sure that the Minister responsible for this area, Baroness Vere in the other place, will be happy to meet him.

Partly answered

Not addressed: The specific plans to deal with the contingency if the court case changes the relationship between customers and operators were not provided.

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Q2 Daniel Zeichner Lab Cambridge
Taxation
Context

The question is prompted by the need to clarify whether a private hire vehicle operator needs to pay VAT, dependent on their role as principal or agent and meeting the VAT threshold. The context includes concerns about an impending court case that could affect the relationship between customers and operators.

Question

Whether she has had recent discussions with Cabinet colleagues on the potential impact of VAT levels on private hire operators. I know the hon. Gentleman is a keen champion for this area, given that he is chair of the all-party parliamentary group on taxis. He will know that the question of whether a private hire vehicle operator needs to pay VAT depends on two factors: whether he is acting as principal or as agent; and whether he meets the VAT threshold.

Answer from Lucy Frazer

I know the hon. Gentleman is a keen champion for this area, given that he is chair of the all-party parliamentary group on taxis. He will know that the question of whether a private hire vehicle operator needs to pay VAT depends on two factors: whether he is acting as principal or as agent; and whether he meets the VAT threshold.

Partly answered

Not addressed: The specific impact of potential changes due to the court case was not addressed.

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