Agent – Principal


Background and useful information

After several court cases, in 2023 the taxi operator UBER won a court case against Sefton Council in England. An appeal against this ruling is to be heard in July 2024
In summary, UBER, having been found Principal for customer bookings in London, were trying to ensure that all taxi companies are made principal for all bookings across the UK

At present, the majority of taxi operators in Northern Ireland and across the UK act as Agent for bookings (the operator takes the booking on behalf of the driver, but the driver fulfils the journey and accepts payment from the customer directly)

• Despite the fact that the UBER judgement is to be appealed, in February 2024 the Department for Infrastructure in NI (The DFI) emailed every taxi operator in NI saying they intended to update legislation here to bring NI in line with legislation across the UK. You can read their email at

The DFI argues that these updates do not change the legislation which is already in place they just clarify it

• In March, the Chancellor of the Exchequer announced that HMRC would conduct a consultation on these changes, specifically the issue of VAT being added to fares as a result of this judgement. The consultation closes on 8th August and although it refers to England, VAT is a UK wide issue and responses are needed from passengers, drivers and operators here in NI. You can read the consultation at

• In April, NI taxi operators from the LTOA representing the taxi sector in NI presented to the Committee for Infrastructure on the implications of these changes. Taxi legislation is a devolved matter, and we wished to convince our local representatives that regardless of the outcome of any appeal or consultation, should the DFI clarify taxi legislation as they intended, it would have serious implications for taxi passengers, drivers and operators. We asked them to ensure that these updates do not happen. You can read the briefing document at

• In June 2024, the Minister for Infrastructure, John O’Dowd wrote to NI taxi operators to reassure them that he was not in favour of any changes which would harm the taxi industry in NI and that he would be responding to the VAT consultation. You can read his letter at

While we as operators welcome the Ministers words of support, the change to Agent / Principal status has implications beyond the VAT issue and we believe that these are still underappreciated by him and his officials. Furthermore, if the Minister has the power to update local legislation to clarify it, potentially making it easier for VAT to be an issue for NI, we believe he also has the power to clarify it with the opposite outcome.
The issue of Agent / Principal has been covered extensively in the media across the UK, but the articles in the taxi industry magazine, PHTM, have been particularly useful. You can read these from

Implications from changes to legislation for NI
Should these updates proceed, taxi operators with fares of the VAT threshold of £90k per annum will be expected to charge, collect and remit VAT of 20% to HMRC on every journey their drivers make
This is calculated on fares, not depot rent or income and is a low threshold. We estimate that an operator with as few as two drivers with fares of £900 per week, or three drivers with £600 per week will be liable. The implications of this are serious and severe.

For a passenger
• Fares increasing by 20% making journeys unaffordable for many
• Payment options being limited as card payments will be preferred to ensure accurate accounting for VAT. This could exclude lower income passengers who do not qualify for a debit or credit card from booking a taxi
• To ensure payment card security, bookings might be restricted to app or web platforms with no telephone service available. This could exclude the elderly, the disabled and the tech poor from being able to book a taxi
• Increased admin responsibilities for drivers will cause some to leave the industry prematurely, thus increasing the ever growing gap between customer demand and driver supply in Northern Ireland making it even more difficult to book a journey

For a driver
• Increased admin responsibilities in collecting and remitting VAT
• Increased customer complaints due to price increases
• Reduced passenger numbers and hence income because of higher prices dampening demand
• Decreased flexibility and cashflow with potential move to card only payments

For a PHVO / taxi operator
• Increased Administrative and accounting responsibility requiring more resource to collect and remit
• Expensive changes to pre-programmed meters, either through replacement or reprogramming
• Expense in educating public about why their fares have had VAT added to them and the resultant customer complaints
• Increased insurance premiums for both Operator and Driver due to ambiguity of “ownership” of Passenger
• Increased administration requirements, but loss of jobs in call centres / Passenger facing roles if telephone bookings are no longer viable
• Increased card / payment platform costs
• Increased potential for card fraud and subsequent loss by the operator
• Further loss of Drivers and a reduced ability to service Passengers at a time when Driver numbers are already at an all-time low
• A decrease in Passenger numbers due to increased fares and some Passenger groups now excluded from booking a taxi. This reduces Driver income.
• Further increase in the size of the illegal Taxi Sector in Northern Ireland putting Passenger safety / welfare at risk

Outside of VAT change implications as a result of the 2023 High Court judgement, operators / PHVO also need to consider
• Under the terms of an operator’s licence in Northern Ireland, operators already must provide services to the passenger such as lost property, complaints, accounts and administration and keep a record of all booked journeys. Making an operator Principal for all bookings seems unnecessary when all these requirements are already in place and expected.
• Principal status may open the operator up to increased customer litigation which operators are neither able to contest or can afford to accommodate
• Principal status may prompt the change in the relationship between operator and driver from self-employed to worker status. Experience from some operators who already have this relationship would suggest that while it provides some benefits to drivers, it increases their costs to compensate and these are often passed onto the passenger

Contesting these updates

The LTOA has and will continue to lobby on behalf of the private hire taxi sector in NI, but the more concerns that are raised, the more likely the issues will be taken seriously. We would ask that you
• Respond to the VAT consultation expressing your concerns for VAT and other implications for taxis in NI
• Lobby the DFI, Minister and officials, to protest any changes to local taxi legislation which will clarify Agent / Principal status thus opening the door to VAT and the other implications detailed
• Talk to your local Councillors, MLA’s and MPs to explain the problems these changes will bring for their constituents and secure their support in making sure they do not proceed

If you require further information about this issue, or the LTOA, please email or visit