Reeves faces backlash over 'taxi tax' Budget proposals

Rachel Reeves is facing a backlash over plans to impose VAT on taxi fares, with critics warning the charge will hit rural residents and make it more expensive for disabled people to attend medical appointments.

- ARCHIE MITCHELL

Campaigners have warned the chancellor that taxing cab journeys will push up the cost of trips outside of London, hitting those living in the countryside hardest.

And they have highlighted figures showing that the NHS spends £460m a year on private hire vehicles and taxi journeys to non-urgent medical appointments, arguing that VAT on cab fares would pile pressure on the already strained health service's budget.

Taxi companies outside London do not currently have to charge VAT on journeys, with drivers considered self-employed contractors. And individual cabbies do not meet the threshold of £90,000 a year in earnings at which they would be liable to pay VAT.