Bolt warns Chancellor it has shelved £200m of investment over Uber VAT ruling

Ride-hailing service Bolt has issued a dire caution to Rachel Reeves regarding the government's lack of action on a threatened 20 per cent VAT rise for taxi operators.

Understandably, City AM has learned that the mobility company has alerted the Chancellor in writing that it has been withholding £200m of UK investment over the past three years due to ministerial indecision around the so-called "taxi tax," as reported by City AM.

Cab, minicab and private hire businesses have faced uncertainty in recent times concerning the potential imposition of an added 20 per cent VAT charge on journeys.

This proposed increase arises from legal decisions which determined that taxi companies, rather than individual drivers, are accountable for establishing contracts with customers.

Detractors of the hike have cautioned that it could lead to inflated travel costs for consumers and reduced income for drivers. Meanwhile, Uber is advocating for "consistency" across the industry.

The San Francisco-based ride-hailing leader had to up its prices after another court decision deemed its London operations could attract VAT.

Uber is awaiting a new judgment on contracting practices at a Supreme Court hearing set for July, a verdict which could determine whether VAT will affect private-hire services beyond the capital.

Bolt's correspondence also reportedly highlights that, aside from investment concerns, the forthcoming Uber decision may render private hire services less affordable and harder to access.

Despite the Treasury initiating discussions on this issue last summer, there's a belief within Bolt that the matter has since been neglected, without finding a solution.

Bolt has criticised the current system as a "postcode lottery," with VAT being inconsistently applied based on business models and location.

Emily Dalton, Bolt's head of UK operations, commented: "The continued uncertainty over VAT on private hire journeys is harming the UK's economic growth – holding back vital investment and innovation in the UK."

She further warned: "The private hire industry is a key part of the UK's transport network, relied upon by millions of people every week. If the Government presses ahead with this 'taxi tax', it will drive up fares, reduce transport options, and hurt those who depend on these services the most."