Taxis: VAT

Treasury written question – answered on 28th October 2020.

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Photo of Thomas Tugendhat Thomas Tugendhat Chair, Foreign Affairs Committee, Chair, Foreign Affairs Committee

To ask the Chancellor of the Exchequer, what discussions (a) Ministers and (b) officials in his Department have had with independent taxi operators on reducing VAT to five per cent.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

The current structure of VAT rates raises a significant amount of revenue for the Government, raising over £130 billion in 2018/19. This plays an important part in funding the Government's spending priorities including hospitals, schools, and defence.

Changes to the current rate of VAT on the transport service provided by independent taxi operators would come at a cost to the Exchequer, and that cost would have to be balanced by increased taxes elsewhere, or reductions in public spending. Although the Government keeps all taxes under review, the Government has no current plans to change the VAT treatment of such goods.

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