From 2 January 2026, VAT-registered UK taxi and private hire operators must charge 20% VAT on the full fare for standard journeys — the Tour Operators’ Margin Scheme is closed for that use.
Taxwise Accountancy summarises Autumn Budget 2025 changes: operators can no longer pay VAT only on the margin for ordinary passenger trips; the principal model applies. A £50 fare becomes £60 with VAT for a registered operator. VAT registration remains required above the £90,000 rolling threshold. TOMS can still apply to wider travel packages with hotels. London already required the principal model for PHV. Official detail sits in HMRC Notice 700/25 and related briefs.