- Campaigners warn the ‘taxi tax’ will hurt struggling pubs, bars, restaurants and clubs by making it harder and more expensive to get a cab.
- Almost half of all minicab trips support the night time economy, a sector still recovering from the pandemic.
- Over a third of Brits (34%) say the tax would make them less likely to use cabs, with 39% saying it would have a negative impact on their social life.
The ‘taxi tax’ – which would add full VAT to the cost of every minicab journey and push up prices for millions of people – will be a “hammer blow” for restaurants, pubs and clubs and risk jobs and livelihoods, campaigners are warning.
The Night Time Industries Association, which represents Britain’s night time economy, is leading warnings that the Taxi Tax will make it harder for people to get to and from a night out, hurting a sector already suffering from onus regulation and high costs.
Adding VAT – a consumer tax – to cab trips will force up fares by up to 20%, putting vital late-night transport out of reach for many, which will mean fewer people able to afford a night out and lower footfall for struggling hospitality businesses.
18-30-year-olds are already going out less, with economic conditions cited as the key reason, and this trend will be entrenched if prices are driven up and made even more unaffordable.
New research for the Stop the Taxi Tax coalition reveals that private hire vehicles and minicabs are a crucial link in the night time economy, with nearly half of users (49%) saying the most common reason for using cabs is to get to or from a night out.
If the taxi tax is introduced, half of Brits say they would cut down how they use these services and 52% say that the additional cost would make them unaffordable all together.
New polling also shows that:
- 71% of Brits are opposed to the ‘taxi tax’.
- 38% of people use a private hire vehicle (PHV) or minicab service at least once a month, with usage higher among younger people (58% of people aged 18–34).
- 34% of Brits say the ‘taxi tax’ would make them less likely to use cabs.
- 39% say it would have a negative impact on their social life.
A separate study for the Stop the Taxi Tax coalition found that [over two-fifths (43%) of UK adults say a lack of available or affordable transport at least occasionally forces them to end nights out earlier than planned, with 14% frequently affected.] [When asked about their preferred way home after a night out, 30% chose either a taxi or a pre-booked app-based minicab service.]
Restaurants, pubs, bars, clubs and live music venues are already facing significant pressure. Post-pandemic recovery has been slow, with small businesses grappling with soaring energy costs, staff shortages, cuts to local transport services, and a punishing and outdated business rates regime.
Michael Kill, CEO of the NTIA, said:
“Our night time establishments, including pubs, restaurants, and clubs, rely heavily on people using cabs. This new tax would be a hammer blow not just to people enjoying a pint or a night out, but to the jobs and livelihoods of people working in the industry.
“It is already difficult for people to get home after a night out and slapping a new tax on one of the few available options would hurt businesses nationwide. We urge the government to stop the taxi tax to protect jobs, safeguard the night time industry and prevent a massive new tax on working people.”
The Stop The Taxi Tax campaign is made up of over 100 local minicab and PHV operators, as well as charities and groups such as The Night time Industries Association, The Survivors Trust and The Rural Services Network.
A spokesperson for the Stop the Taxi Tax campaign said:
“This would be a real blow to people who enjoy a few drinks after work or want to use our hospitality sector and rely on minicabs to get home.
“The Taxi Tax breaks Labour’s manifesto promise not to raise VAT and would make it harder for people to support their local economy. We urge the Government to Stop the Taxi Tax to protect jobs and passengers from dramatically higher prices.”
