The cost of taking a taxi in London is set to soar after the Chancellor confirmed a new tax on minicabs .

During her Budget on Wednesday, Rachel Reeves revealed private-hire vehicles from ride-sharing apps such as Uber and Bolt will see 20 per cent VAT added on to journeys.

The move is expected to bring in about £700 million for the Treasury by 2027-28.

The Government argued it was closing loophole that was originally intended for tour operators.

Under the the Tour Operators' Margin Scheme (TOMS) some taxi firms were effectively paying a reduced VAT rate by charging it only on their profit, rather than the full fare.

But from 2 January next year, every private-hire trip in London, and any operator nationwide that charges passengers directly, will have to add full the VAT.

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