Black cabs backed as tax loophole used by online taxi firms closed

As announced at the Budget by the Chancellor, private hire vehicle operators in London will no longer be able to use the Tour Operators Margin Scheme - a niche tax scheme designed for tour operators and holiday coach trips – to significantly reduce the VAT they pay on fares, the government has announced.

This means that black cabs will no longer have to compete with online mini cab firms who are misusing this scheme to pay less VAT, the government claims.

Chancellor of the Exchequer, Rachel Reeves, said: “We’re putting the brakes on the illegitimate use of a niche tax scheme to protect everyday cabbies. We’ll use the £700m a year this raises to deliver the country’s priorities - cutting the cost of living, cutting waiting lists and cutting debt and borrowing.”

• What do you think of the scheme?
• How important is it that the tax on cabs is fair?
• Are Labour doing enough for black cab drivers?

Responses this morning please.