A top solicitor involved in the landmark Supreme Court ruling on private hire VAT has warned that the Chancellor’s proposed “taxi tax” could have severe and unfair consequences for vulnerable passengers across the UK.
According to a statement provided directly to DM News by Layla Barke-Jones, Dispute Resolution Partner at Aaron & Partners and the solicitor who represented Delta Taxis in the recent Supreme Court victory over Uber, the reported plan to force VAT on all private hire fares would “undo years of legal progress” and overturn the clarity established by the UK’s highest court.
Landmark ruling clarified that VAT is not automatically required
Barke-Jones played a central role in the Supreme Court case earlier this year, where the court confirmed that private hire operators outside London are not automatically required to charge VAT on all fares—protecting long-standing operating models and helping prevent significant fare rises for passengers.
In her comment shared with DM News, she said the legal clarity gained this summer “helped protect passengers from consequential fare increases, while allowing local businesses to continue operating in a way that suits their size and structure.”
Warning: forcing VAT on all fares would require a change in the law
Barke-Jones cautioned that the Chancellor’s reported plan would effectively override the Supreme Court’s decision:
“Against that backdrop, proposals for a so-called ‘taxi tax’ raise serious questions. Forcing VAT on all fares would require a change in the law, overriding the clarity provided by the courts in the summer, and could place an unfair burden on small operators who are already managing tight margins.”
“The most vulnerable will feel it the most”
She stressed that policymakers must consider who relies on private hire services:
“Private hire taxis are a vital service for people who rely on them for essential everyday travel: particularly elderly passengers, disabled people, and lower-income households. These are the very groups who would feel any cost increase most sharply.”
The solicitor urged the Treasury to “tread carefully” and consult widely—including passenger groups—before pushing forward with any VAT changes.
DM News Commentary
This warning comes at a crucial moment for the taxi and private hire trade. With the Budget days away, drivers and operators across the UK are already bracing for uncertainty surrounding VAT, compliance costs, and the long-running push toward electrification.
Many drivers tell DM News that they’ve been encouraged to go electric, adopt cleaner vehicles, and absorb rising insurance and fuel costs—yet now face the prospect of another major financial hit. A blanket VAT requirement could see fares rise sharply while squeezing operators who are already running on tight margins.
For an industry that provides essential travel for hundreds of thousands of people every day, any new “taxi tax” would need careful and inclusive consideration—not rushed changes with unintended consequences.
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