Shopmobility Renfrewshire has warned that plans to impose VAT on private hire vehicle (PHV) fares could hit disabled, older and low-income passengers hardest.
Chancellor Rachel Reeves is expected to outline the measure in the Autumn Budget on Wednesday 26th November 2025. Reports suggest the Treasury is considering applying a 20% VAT charge to all PHV journeys, including those booked through local operators such as Renfrewshire Cab Co, Alpha Taxis Johnstone, or Renfrewshire TOA.
Currently, most Hackney taxis and many PHV drivers operate below the VAT registration threshold, meaning passengers often do not pay VAT on fares. Bringing PHVs fully into VAT would make millions of journeys 20% more expensive overnight, with the Treasury estimating it could raise hundreds of millions of pounds in new revenue.
Critics, however, say the move would unfairly hit those who depend on affordable transport.
Sandeep Kaur, a director of Shopmobility Renfrewshire, said the changes would be devastating for people with mobility issues.
She said: “Many people with mobility disabilities like myself have to rely on taxis to get about, whether that’s GP or hospital appointments, or even simply going shopping. Taxis are an essential part of my ability to get around.
Photo: Sandeep Kaur from Shopmobility Renfrewshire
“This move will have a devastating impact on vulnerable people who rely on taxis and could lead to more social isolation.
“I would hope that the Chancellor would listen to the concerns of those of us who have no other option but using taxis. Many bus companies including McGills refuse to allow mobility scooters on their vehicles so we will be left having to pay more for what would be essential journeys.”
Industry groups have also warned of knock-on effects for the hospitality sector, with fears that millions fewer trips will be made to pubs and restaurants each year if fares rise.
If approved later this month, the change would represent the biggest shake-up of taxi and private hire pricing in years, bringing Hackney carriages and private hire firms under the same VAT rules for the first time.
Headline photo: Generic library stock photo of a taxi sign
Photo Credit: Mehmood Yousafzai / pexels