Minicabs soar past Uber’s roadblock

The court unanimously rejected Uber’s argument that private hire operators enter into individual contracts of hire with passengers, which would have resulted in VAT being charged on all fares, in DELTA Merseyside and Veezu Holdings v Uber Britannia [2025] UKSC 31. Consequently, the private hire companies can continue to operate as agents for their drivers.

DELTA had warned the extra 20% on fares would make them unaffordable for many passengers, with ‘seismic consequences’ for the industry as well as increased costs for the NHS, education authorities and other public bodies.

DELTA successfully argued that the regulatory regime outside London and Plymouth laid down in Part II of the Local Government (Miscellaneous Provisions) Act 1976 allows for multiple business models. The court agreed that, while Uber’s model does trigger VAT liability, competitors can lawfully operate using alternative structures that do not.

Layla Barke Jones, partner at Aaron & Partners, representing DELTA, said: ‘This ruling ensures that operators can continue to operate under established, regulated models that have been in existence since regulation was introduced almost half a century ago.

‘Private hire firms are vital in the communities, and are used frequently by those with disabilities, low-income households and older people who rely on taxis for essential journeys and to maintain their independence. If VAT suddenly had to be paid by all those people, the additional cost would have meant many simply choose not to travel at all, leaving some of the most vulnerable people in our society isolated.

‘A crisis has been averted.’

Nia Cooper, chief legal officer at Veezu, said the ruling ‘confirms that operators can continue to choose which business model they adopt to run their business’ and also ‘shows that British-owned businesses can stand up against global giants that attempt to use litigation as a tactic to shape the sector to suit their business model’.