NPHTA: THE YEAR AHEAD


OUT WITH THE OLD – IN WITH THE NEW WHAT ARE WE HOPING FOR IN 2026?


Article by Dave Lawrie, Director NPHTA info@nphta.co.uk


As 2025 drew to a close, the taxi and private hire industry was left reflecting on a year dominated by VAT, legal rulings, policy debate and widespread misunderstanding - and asking a single pressing question: what happens next?


VAT on private hire fares


Thankfully following two successful court cases, the autumn budget and the long-awaited government response to the VAT consultation on private hire fares, there was welcome relief across much of the sector.


No change for the majority of operators who use the agency model for cash fares, although greater clarity is still needed for traditional, small-to-medium size London operators; also no change for private hire drivers themselves and the standard 20% VAT rate continues to apply to fares charged by VAT-registered businesses.


However, from 1 January 2026, PHV operators, such as the ride-hailing platforms, will no longer be permitted to use the Tour Operator Margin Scheme (TOMS) when accounting for VAT.


We eagerly await to see how the government’s decision will reshape the competitive landscape for all our industry.....


Policy discussions and devolution


Meanwhile the NPHTA has been actively engaged in the Transport Select Committee inquiry, covering licensing reform, cross-border working (or predominant out-of-area use), national standards, service provision and enforcement; and we look forward to reading the inquiry report and its recommendations which we hope will be published by March 2026.


At the same time, the Devolution White Paper continues its passage through Parliament, having completed its third reading in the Commons and its second in the House of Lords.


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It is important to understand what devolution actually means for our industry. The vast majority of the legislation relates to wider local authority functions - planning, education, social care, policing, highways and leisure services. Taxi and private hire licensing occupies only a small section.


The hope within the trade is that devolution will deliver genuine efficiencies: reduced costs passed on to licence holders, faster and more consistent application processing, and critically - improved enforcement.


That enforcement must be meaningful. It must address unlawful plying for hire by private hire vehicles, the illegal occupation of taxi ranks, and the growing problem of abuse and false allegations against licensed drivers.


The Casey Report and cross-border working


The national rollout of the Casey Report, originally published in 2012 following events in Rotherham, has added further momentum to calls for licensing reform. This updated version includes 12 recommendations, only one of which makes reference to the taxi and private hire sector.


Within that single reference, it is claimed that cross- border working is the core issue and that it stems from the Deregulation Act 2015. This is factually incorrect as the Act was introduced three years after the original report was published. Despite this factual error, the report has been debated in both Parliament and the House of Lords, with a clear commitment to adopt all recommendations - including ending cross-border hiring.


That sounds great and the intention is welcome, but the critical question remains: how will it be achieved?


Will national standards fix cross-border working? The short answer is no.


National standards alone will not prevent licensing “shopping around”. A simple analogy explains why. A jar of Nescafe coffee is the same product wherever you buy it in the UK, but price differences mean you might buy it from ASDA one week and Tesco the next. That is basic economics - and licensing is no different.


JANUARY 2026 PHTM


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