Independent readers have reacted with anger to Rachel Reeves’ proposal to impose VAT on taxi fares, warning it would unfairly penalise rural residents, older people and those with disabilities who rely on cabs for essential journeys.
Many highlighted the high cost of taxis in the countryside, where public transport is scarce or non-existent, and dubbed the policy as “London-centric”.
Readers said that hospital trips, supermarket runs and school transport already stretch household budgets, and that adding 20 per cent would reduce mobility, deepen isolation, and put additional strain on local councils.
They also pointed to the strain on the NHS, which spends around £460m a year on non-emergency patient transport services – a system that often includes the use of taxis and private hire vehicles to take people to medical appointments.
Others suggested alternative sources of revenue, including reforming council tax or targeting luxury services such as private healthcare, rather than taxing those who use taxis out of necessity.
While a handful of readers argued that taxis are often a luxury and should be taxed like other services, the overwhelming response condemned the idea as regressive, short-sighted and a betrayal of vulnerable communities.
Here’s what you had to say:
The elderly who cannot drive will be penalised
In Cornwall, where I live, the taxi fare each way to the nearest hospital is around £100, sometimes £120. That is each way. Mostly the people who use these taxis are old ladies or men who cannot drive, but have to go to hospital and are not able to reclaim money because they are not on pension credits or some other benefit. There are plenty of these people, mainly widows who came to Cornwall and then lost their husband, but have just enough money to be above the threshold for benefits.
Baritonb2
They use taxis because they have to
Don’t do it. I know lots of people who use taxis because they have to. In areas of poor public transport, and they can’t afford a car, for supermarket shopping, hospital/doctor appointments, etc. An extra 20% is a huge hike, cab owners will lose income, and people will lose mobility.
bloodwort
A disaster waiting to happen
I live in rural Herefordshire. No car, no support network for trips. Two buses a week to the nearest town, eight miles away. That service is currently under threat. A single taxi from or to there costs £30 now. A dedicated bus gang keeps the current service going by willpower alone, but the buses constantly break down. Lucky to have even that.
I met a chap from a different area, the New Forest, who told me they have no bus service at all. Factor in the age of rural dwellers, and the new stringent regulations for drivers over 70, and you have a full-on disaster waiting to happen. Also likely increase in drink driving back from the pub. Another own goal for the government.
OkTed
VAT should apply outside London
I don’t understand why taxi fares outside London have not been subject to VAT. It’s time for the regions to pull their weight rather than just spend, spend, spend the money that is generated in London from Londoners and the work they do.
I can hear the howls already from those who want a free ride.
rEUjoin
Tax luxury services
There is a huge tax opportunity which I think we are missing.
How do rich people spend their money? They buy specialist services unavailable to the general public – private schools, private health care, chauffeur-driven cars, yachts in club moorings, stables for ponies – the list is very large.
Reeves has made a start in removing VAT relief from private schools, but she should go further and tax them. She should make a list of all these ‘luxury’ goods and services and put punitive taxes on them until they no longer exist. For a start, she could remove the VAT relief on private health care – oh yes, private medicine usually gets the same VAT-free perk that private education used to. Private health turnover in the UK last year was £12.4bn – 20 per cent of that would be £2.5bn per year. Soon fill the black hole…
Dodgy Geezer
Council tax
I only have three things to say:
- Council tax
- Council tax
- Council tax
The cap on council tax is absurd and a gift to the very rich. We need more bands on top of the existing ones so that the very rich pay more. Doing this would be simple, cheap, and would have no adverse impact on the average person.
Palemale
Additional pressure on taxpayers
Apart from adding to NHS costs, a lot of taxis are provided by local authorities to get kids – especially SEN kids – to schools in rural areas. That cost will also put additional pressure on taxpayers.
SteveHill
Address the root of government borrowing
The government needs to deal with the real reason for the unsustainable level of government borrowing, which is record government spending. And this means cutting the areas which have seen high growth in recent years: old age benefits, sickness benefits, free health care, and social care.
Mark
The sticks
Most people outside London use taxis because they don’t have a viable alternative for the journeys they wish to make. Here in the sticks, we don’t have a closely integrated, all-encompassing transport system. Ms Reeves seems to want to unfairly punish people for being needy. Where have I heard that before? Am I sensing a U-turn already?
Nomoneyinthebank
Fuel duty
Fuel duty rise is long overdue. Increase it and let those who drive for a living or the businesses they work for claim it as a business expense on their tax return. Hike the top earners tax as well.
BikingBoomer
Taxis are a luxury for most
I see taxis where I live mainly used to take people to the airport so they can catch flights to their expensive foreign holidays, or go out on the town and not need to worry about having a few bevvies.
I am sure there are some people who would fall into the ‘no alternative and impoverished’ category, but disabled people get vouchers they can use on taxis, and a lot of people could actually walk a couple of miles without killing themselves. Actually, do them the world of good.
Taxis are a luxury for most users, so it would make sense to charge VAT just like private motorists have to pay on diesel and petrol, and charging EVs on public charging stations.
Of course, the taxi business is also part of the black market in a lot of cases.
CanPeopleReallyBeThisStupid
London-centric
Another half-baked idea from the London-centric Treasury. My council uses taxis a lot for school runs, so this is just more cost. Why does she and the Treasury come up with something that will be both acceptable and work? Try closing some tax avoidance loopholes; that would be a good start.
ZZiggurat
Vulnerable groups will suffer
Penalising those who can’t or are not allowed to drive by DVLA because of age or disability, those who cannot afford a car, people in rural areas, the young, and the vulnerable having to walk home at night… Is she secretly working for a right-wing party and trying to lose support?
Holly
Some of the comments have been edited for this article for brevity and clarity.
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