§ Mr. Alfred Morrisasked the Chancellor of the Exchequer if the provision of transport by a local authority to an individual disabled person or a voluntary organisation of disabled people is regarded as a business activity and thus liable for value added tax on top of any charges levied; and if he will make a statement.
§ Sir Geoffrey Howe[pursuant to his reply, 15 December 1980]: The transport of passengers in any vehicle designed or adapted to carry not less than 12 passengers is zero rated for value added tax purposes.
If the supply of transport services by a local authority is made free of charge or is specifically subsidised by the local authority it is outside the scope of the tax.
In all other circumstances the supply of passenger transport is a business activity and the charge is taxable.