A senior legal partner involved in the landmark Uber v Sefton / Delta Taxis Supreme Court ruling earlier this year has issued a clarification following the Chancellor’s Budget announcement on removing private hire vehicle (PHV) operators from the Tour Operators’ Margin Scheme (TOMS).
Driver Matty at DM News got contacted by Aaron & Partners, they said the removal of TOMS from January 2026 does not undo the legal protections secured for agency-model private hire operators through the Supreme Court case involving Uber and Merseyside-based Delta Taxis.
What Aaron & Partners Said About the Budget VAT Change
In the statement, Layla Barke-Jones — Dispute Resolution Partner at Aaron & Partners, and the solicitor who represented Delta Taxis in the Supreme Court — stresses that the Budget announcement must not be confused with the earlier ruling.
She confirmed that although the Chancellor revealed that ride-hailing and PHV operators will no longer be allowed to use TOMS from January 2026, the Supreme Court judgment still stands.
“Following the Supreme Court decision earlier this year involving Uber and our client, Merseyside-based DELTA Taxis, this announcement will not affect fares from those private hire firms that use an agency-based model,”
wrote Aaron & Partners in their statement
(source).
The firm added that the Supreme Court victory ensured operators outside London cannot be forced to switch business models in a way that pushes VAT costs onto passengers — a key fear across the industry when the case first emerged.
Barke-Jones also advised operators to:
- Review their contractual arrangements promptly
- Ensure they operate under the correct business model
- Protect themselves from tax and regulatory risks that could arise if contracts or operating structures are not compliant
DM News Commentary
This clarification is one many in the taxi and private hire industry will welcome. Since the Budget announcement, there has been confusion among drivers and operators about whether the change to TOMS means all PHV fares will be VAT-able at 20% from 2026.
Aaron & Partners’ statement makes it clear: the Supreme Court ruling still protects operators working under an agency-based model, such as Delta Taxis. These firms should not automatically face VAT on every fare as a result of today’s Budget.
However, it also highlights the growing complexity in PHV taxation. Operators who do use TOMS, or who have hybrid arrangements, will need to take urgent advice and restructure if needed. With HMRC revenue-raising measures focused on the gig-economy transport sector, this is unlikely to be the last major change drivers and operators face.
DM News will continue monitoring developments — especially how this affects smaller regional operators, app-based platforms, and drivers who are already unsure whether VAT changes will impact fare prices in 2026.
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