Campaigners are sounding the alarm over the impact of a new “taxi tax” on rural communities, with new research showing concern for those living in the British countryside.
Chancellor Jeremy Hunt and Prime Minister Rishi Sunak have been urged to “intervene urgently” and “stop the taxi tax dead in its tracks” after a High Court case last year ruled that taxi companies, not taxi drivers, were liable for VAT.
The new tax could lead to every fare rising by 20% if it is not addressed in the next budget.
Pressure group “Stop the Taxi Tax” is urging the PM and Chancellor to step in and publish the promised consultation as soon as possible so action can be taken at the March 6 Budget.
Do YOU live in a rural area of the UK? Would plans to slap an extra 20% on taxi fares impact you? Let us know in the comment section or email sam.stevenson@express.co.uk.
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A campaign source told Express.co.uk: “Our rural communities are often forgotten by the Westminster bubble – with record-low transport options already impacting the nine million people living in rural areas.
“Amid bus route closures and train cancellations, the Taxi Tax will add further pressure to the lives of people outside of the big cities who rely on minicabs.
“We need action from the Chancellor and the Treasury urgently to stop this issue – before it has an impact on the elderly, the most vulnerable and the most deprived communities.”
According to new data from the Stop the Taxi Tax campaign and YouGov, almost two-thirds (62%) of people cited the negative impact the taxi tax will have on those living in areas with limited public transport as among their top concerns.
Jonathan Gullis, MP for Stoke-on-Trent North, said: “A significant number of vulnerable people who live in well-populated areas still rely heavily on minicabs to get to loved ones in rural parts of the UK with poor public transport options, including in my constituency – hitting them with the taxi tax makes no moral or economic sense at a time when the cost of living is already high.
“The Prime Minister and Chancellor should intervene urgently, responding the the High Court ruling, and ensuring we as Conservatives stop the taxi tax dead in its tracks.”
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HMRC wants 20% VAT levied on the full fare of all private hire (PHV) and minicab rides – which would raise prices for passengers across the country and potentially lead to job losses across the sector and a reduction of services, particularly in more rural areas.
The move has enraged campaigners, who point out that many rural areas already have less than one licensed vehicle per 1,000 people and are likely to be left with no service at all if smaller operators are forced to close.
With over 9.7 million people currently living in rural parts of England, tens of thousands could be left with “no viable transport options” if the tax hike goes ahead, with research suggesting almost one million people have no option for convenient and affordable public transport.
The Rural Services Network, an independent membership organisation made up of over 500 organisations across England, has warned the tax grab would disproportionately hit rural communities and especially the elderly and most vulnerable, who rely on minicabs for essential journeys.
Kerry Booth, Rural Services Network Chief Executive, said: “The taxi tax would be a real blow to rural communities, who are once again being disadvantaged.
“There are already fewer transport options for people living in rural areas following the cuts we’ve seen to bus routes due to the lack of funding for rural councils.
“The taxi tax will make it even harder and more expensive for people living in rural areas to make essential journeys, not least because it risks putting smaller operators out of business and taking minicabs off rural roads.
“It will hit rural small businesses hard by making it more expensive for people to visit and bring their custom.
“The knock-on effect on the rural economy could be felt for years to come. I urge the Government to listen and support rural communities rather than penalise them again.”
One in four bus routes have already ceased in rural areas between 2012 and 2022 – around 5,000 in total – and those living on the lowest earnings in villages and hamlets spend nearly twice as much per week on transport costs as those in cities.
This will also put the most vulnerable at risk – with almost a fifth (19.1%) of people living in rural areas not having access to a GP within half an hour’s travel using public transport.
As well as the impact on low-income households, a quarter of the rural population are 65 and over (25.4%), meaning this is expected to impact elderly people too, with new data from the Stop the Taxi Tax campaign showing that three-quarters (75%) of over-65s were opposed to the tax.
It comes as a poll suggests the Conservatives are “struggling to keep hold of their rural heartlands”, with a 25-point collapse in support from people in England’s 100 most rural constituencies.
The Government promised to consult on the taxi tax in “early 2024”, but there has been no sign of action.
Campaigners from The Stop the Taxi Tax Coalition – which includes the Rural Services Network, the Federation of Small Businesses, Survivors Trust plus drivers and operators across the private hire and minicab trade – are urging the Prime Minister and Chancellor to “stop kicking the can down the road” and publish the promised consultation as soon as possible to ensure a solution can be found by the Spring Budget.
Gareth Cadwallader, spokesperson for Stop the Taxi Tax, said: “The taxi tax will leave a transport black hole in rural communities.
“Private hire vehicles and minicabs provide an essential service in rural communities and fill the gap left by the lack of public transport.
“The taxi tax hammers the only transport option people can rely on and will seriously harm some of the poorest and most isolated communities in Britain.
“Many elderly and vulnerable passengers I drive rely on my service to get to hospital, their GP and the supermarket and have no viable alternative.
“We need the Prime Minister and Chancellor to step up for these communities and take urgent action.”
