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Taxi-Cabs

Volume 930: debated on Thursday 28 April 1977

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26.

asked the Chancellor of the Exchequer why the purchase of a licensed taxi-cab incurs VAT whereas it was exempt under the purchase tax system.

VAT applies to all motor vehicles, whereas purchase tax was restricted to cars. Proprietors of London-type taxis who are registered for VAT can deduct the tax paid on their cabs.