Chancellor Considers VAT Hike on Taxi Journeys in Autumn Budget
Rumours are circulating that the Chancellor, Jeremy Hunt, is considering a VAT increase on all taxi journeys in the upcoming autumn Budget. Taxi operators and business leaders have raised concerns about the potential impact on drivers, passengers, and the wider economy.
The proposed 20% VAT on full fares would significantly hit self-employed taxi drivers, who are already facing economic pressures. Bolt, a ride-hailing company, argues that VAT should target operators' margins instead, to avoid hiking passenger costs and reducing driver earnings.
Business leaders fear the 'taxi tax' would further dampen consumer demand and increase costs for vulnerable passengers, such as the elderly, disabled, or those unable to use public transport. They warn that this move could negatively impact the already fragile economic environment, echoing the job losses seen in hospitality last year due to increased employer National Insurance contributions.
Charlie Gilkes, co-founder of the Inception Group, has cautioned that such policies could 'destroy the ecosystem' of the hospitality sector. Local authorities, however, would be able to reclaim the VAT, but passengers across the country would face significantly higher fares for essential journeys.
The potential VAT increase on taxi journeys has sparked concern among taxi operators, business leaders, and passengers. As the Chancellor considers this policy, it's crucial to weigh the impact on drivers, passengers, and the broader economy. The final decision could significantly shape the future of the taxi industry and the wider economy.
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