TAXI drivers have written to Jeremy Hunt on the eve of the Budget to demand he starts the process for scrapping the so-called ‘Taxi Tax’.
More than one hundred bosses from the private hire industry are demanding the Chancellor intervene to stop a 20 per cent tax being slapped on journeys.
PATaxi and private hire firms demand the scrapping of 20 per cent levy[/caption]
They say they operate in some of the most deprived areas of England and Wales which will “hammer” communities who rely on the service.
Ministers have been told that the sector faces an “uncertain future” without any action being taken in this week’s financial statement.
A recent High Court ruling has exposed taxi firms to VAT on full fares which the sector is now calling for the levy to be cancelled.
The group of 130 signatories want the Chancellor to launch a consultation on the issue with a view to scrapping the levy.
They write: “With the ongoing cost of living crisis, this is the worst possible moment to impose 20% VAT on fares.
“The recovery of local high streets rests on consumers enjoying affordable and accessible services.
“Levying a new tax on taxis will pare back transport options for consumers, triggering a knock-on effect for local businesses and hospitality at a time of economic turbulence.”
They add that any ongoing delay to find a solution is “ causing significant uncertainty” both for the industry and its passengers.
The Chancellor said in his Autumn Statement in November that he would launch a consultation but this has yet to be formally launched.
Tory MP Jonathan Gullis said: “The signatories of this letter across the country know more than anyone else about the damage that their sector faces if a disastrous tax is levied on cab journeys.
“I urge the Chancellor to listen to them and act now to protect their livelihoods.”
The levy risks a fresh blow to the already struggling hospitality trade who rely on 15 million cab journeys a year.
The Budget will take place on Wednesday.
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