# Taxi business plan: what to put in it, section by section

> A taxi business plan sets out who you'll carry, how bookings will reach you, your licences, fares, costs and how you'll fund the first year. Lenders expect one, and a government-backed Start Up Loan of £500 to £25,000 comes with help to write it. Build yours in eight sections, using your own council's fees and the Department for Transport's licensing figures.

By Joe, founder of Dispatch AI. Updated 2026-10-11. The web page: https://dispatchai.co.uk/guides/taxi-business-plan/

A taxi business plan is how you find out, on paper, whether your firm can pay its way before you spend money on licences and cars. Here are the eight sections it needs, what goes in each, and where to get real figures for them. It works the same for one car or ten.


## What is a taxi business plan for?

A taxi business plan is a written test of your firm: who your customers are, how their bookings will reach you and whether your fares cover your costs. GOV.UK describes a business plan as a document covering objectives, strategies, sales, marketing and financial forecasts, and says you'll need one to get investment or a loan from a bank.

You're the first reader. Writing the numbers down is how you spot the month when the licence fees and insurance have gone out and the fares haven't come in yet.

A lender is the second. Start Up Loans, the government-backed scheme, gives applicants help to write their plan.

Your council can be the third. Manchester City Council lists a business plan among the attachments for a non-standard private hire operator licence, the one for chauffeur, limousine, airport travel and similar firms, and its standard operator application asks for your fare tariff. Check your own council's application checklist before you apply.


## What should a taxi business plan include?

A taxi company business plan needs eight sections. Keep each one short, and put a number in every section you can.

| Section | What goes in it | Where the figures come from |
|---|---|---|
| 1. Summary | Your area, services, fleet size, licence and the money you need, in a few lines | Written last, from the other seven |
| 2. The firm and its licences | Sole trader or company, the operator licence, which council, when you'll apply | Your council's fee page and checklist |
| 3. The market | How many cars and operators are licensed, who already works your area | DfT statistics and your council's public register |
| 4. Customers and services | Airport runs, account work, school runs, nights, pre-books | Your own research and conversations |
| 5. Fares | How you price: fixed fares, airport fares, waiting time, account rates | The council's hackney tariff and your own price list |
| 6. Bookings and marketing | How jobs reach you: phone, WhatsApp, website, account customers | Supplier quotes |
| 7. Running the firm | Drivers, cars, office hours, booking records, safeguarding | The Statutory Taxi and Private Hire Vehicle Standards |
| 8. Money | Start-up costs, monthly costs, a cash flow forecast and your funding | Fee pages, quotes and a template |

You don't have to start from a blank page. GOV.UK points to a free business plan template from The King's Trust, and to a business plan template and a cash flow forecast template from Start Up Loans.


## How do you size the market for a taxi firm?

Start with the Department for Transport's statistics, then narrow them to your own council area. As at 1 April 2026, England had 290,000 licensed private hire vehicles, up 13% on 2024, and 52,300 licensed taxis, down 7%. There were 19,000 private hire operator licences, up 17% from 16,300 in 2024, and councils received 3,700 applications for new operator licences.

For a private hire business plan, that says two things. Pre-booked work has grown, and so has the number of firms chasing it.

Be careful with local figures. The DfT warns that the number of vehicles a council licenses isn't the number working in its area, because drivers can license in one place and work in another. Wolverhampton licensed about 38,000 private hire vehicles, 13.1% of all those in England. Use the DfT's table TAXI0105 for licensed vehicles per 1,000 people by licensing authority, then search your council's public register to see which operators already work near you.

For demand, HMRC's November 2025 policy paper on private hire VAT gives national trip rates for 2024: an estimated 9.5 taxi or private hire trips a year for women, 8.0 for men, and 12.2 for people with a disability against 8.5 for people without. Multiply rates like these by your area's population to get a ceiling for the whole trade, then write down honestly what share of it you think you can win, and why.

One gap is worth a line in any plan. Only 2% of licensed private hire vehicles in England were wheelchair accessible in 2026, against 54% of licensed taxis.


## How do you set fares in the plan?

Show how you got to each fare, not only the fare itself. A lender will ask, and so will you, six months in.

If you'll run hackney carriages, your council may set the fares. Section 65 of the Local Government (Miscellaneous Provisions) Act 1976 lets a district council fix a table of fares for hackney carriages, by time and distance.

Private hire fares aren't covered by section 65, so you set your own. Some councils still ask to see them: Manchester wants your fare tariff with an operator application.

A simple way to build the fares section:

1. Work out what an hour on the road costs you: driver pay or commission, fuel, insurance, licences and your booking costs.
2. Price your common journeys first: the airport, the station, the hospital, the next town.
3. List the extras you'll charge, such as waiting time and baggage. HMRC treats both as part of the fare for VAT.
4. Compare your prices with the council's hackney tariff and with what local firms quote on the phone.

Our guides to [pricing taxi fares](https://dispatchai.co.uk/guides/how-to-price-taxi-fares/) and [taxi zone pricing](https://dispatchai.co.uk/guides/taxi-zone-pricing/) go further.


## What costs go in a taxi business plan?

Split your costs into start-up costs and monthly costs. Start-up costs are mostly licence fees: our guide to the [cost to start a taxi business](https://dispatchai.co.uk/guides/cost-to-start-a-taxi-business-uk/) has a line-by-line table, and a worked example in which a two-car firm in Hertsmere pays £2,344 in fees before insurance.

Monthly costs are insurance, fuel, licence renewals, the phone line, booking software and staff. If you'll employ anyone, use the 2026 to 2027 rates. The National Living Wage is £12.71 an hour for workers aged 21 and over from 1 April 2026, and employers pay 15% National Insurance on each employee's earnings above £5,000 a year.

**Example.** One controller on the phones from 10pm to 6am, five nights a week, is 40 paid hours a week.

| Line | Sum | Cost |
|---|---|---|
| Weekly wage at the National Living Wage | 40 × £12.71 | £508.40 |
| Yearly wage | £508.40 × 52 | £26,436.80 |
| Employer National Insurance | (£26,436.80 less £5,000) × 15% | £3,215.52 |
| **Example yearly cost** | £26,436.80 + £3,215.52 | **£29,652.32** |

Covering all seven nights takes more than one person, so repeat the sum for each of them. Each sum is before holiday cover and pension contributions. An eligible employer can claim the Employment Allowance, which takes up to £10,500 a year off the employer National Insurance bill.

One alternative to price in the same section is software on the overnight line. Dispatch AI is booking and dispatch software for taxi and private hire firms, and its AI phone agent answers your booking line when your office doesn't, quotes your own fixed prices and books the job into your Dispatch AI account. You can put [the Dispatch AI prices](https://dispatchai.co.uk/prices/) next to the wage sum.

Then build a cash flow forecast, month by month for the first year. Licence fees and insurance land before your first fare, and the forecast shows how big that gap is.


## How can you fund a new taxi firm?

Write down how much you need, when you need it and where it comes from. The options are your own savings, a loan, finance on the cars, or drivers who bring their own licensed cars, which cuts how much you need to borrow.

A Start Up Loan is the government-backed option. GOV.UK sets out the terms:

| Start Up Loan term | What GOV.UK says |
|---|---|
| Amount | £500 to £25,000 |
| Type | An unsecured personal loan, with a credit check |
| Interest | A fixed rate of 7.5% a year |
| Repayment | Over 1 to 5 years, with no application fee and no early repayment fee |
| Support | Help to write your business plan, and up to 12 months of free mentoring for successful applicants |
| Who can apply | You live in the UK, you're 18 or over, and the business has been fully trading for less than 5 years |

**Example.** On a standard repayment loan, £10,000 over five years at 7.5% a year comes to about £200 a month, or about £12,000 in total. Ask the lender for its own figure before you put it in the plan.


## What risks should a taxi business plan cover?

Every plan rests on a few things you don't control. Name them and say what you'll do about each.

| Risk | What to write in the plan |
|---|---|
| Licence renewal | Your renewal dates, and the HMRC tax check you need at renewal (codes expire after 120 days) |
| Insurance prices | Quotes for each car, not a guess: one broker's private hire range is £1,200 to £3,000 a year |
| VAT | When taxable turnover will pass £90,000 in 12 months, the point at which you must register |
| Driver supply | How many drivers you need for each shift, and how you'll recruit them |
| Rule changes | The DfT consulted from 8 January 2026 on cutting the 263 licensing bodies to 70 local transport authorities, and the taxi licensing chapter of the English Devolution and Community Empowerment Act 2026 isn't in force yet |
| Safeguarding | Who checks your drivers and office staff. The statutory standards say outsourcing booking and dispatch doesn't pass on your duty to protect children and vulnerable adults |

Our guides to [tax for a taxi business](https://dispatchai.co.uk/guides/tax-for-a-taxi-business/) and [taxi driver recruitment](https://dispatchai.co.uk/guides/taxi-driver-recruitment/) cover two of these in detail. Once the firm is running, turn the plan's numbers into the [taxi business numbers to track](https://dispatchai.co.uk/guides/taxi-business-numbers-to-track/) each month.

## Frequently asked questions

### How long should a taxi business plan be?

Long enough to answer the eight sections with numbers, and no longer. A lender reads the summary and the money section first, so make those two the strongest. Everything else backs them up.

### Do you need a business plan to get an operator licence?

The law doesn't require one: section 55 of the 1976 Act asks the council to be satisfied you're a fit and proper person. Some councils ask anyway. Manchester City Council lists a business plan for a non-standard operator licence, so read your council's checklist.

### Where can you get a free business plan template?

GOV.UK's business plan page links to a free template from The King's Trust. Start Up Loans offers a business plan template and a cash flow forecast template, and applicants get help to write the plan.

### What should the summary of a taxi business plan say?

Where you'll work, what you'll carry, how many cars, which licence and how much money you need. Write it last, in plain words, so someone who reads nothing else knows what the firm is. Keep it to a few lines.

### Should a new taxi firm plan for wheelchair-accessible cars?

Look at your area first. Only 2% of licensed private hire vehicles in England were wheelchair accessible in 2026, and the DfT notes that councils must keep and publish lists of wheelchair-accessible taxis and private hire vehicles under section 167 of the Equality Act 2010. Those lists show you how many your area already has.


## Sources

- [Write a business plan (GOV.UK)](https://www.gov.uk/write-business-plan) what a plan covers and the free templates
- [Apply for a Start Up Loan for your business (GOV.UK)](https://www.gov.uk/apply-start-up-loan) amounts, rate, term and eligibility
- [Taxi and private hire vehicle statistics, England: 2026 (Department for Transport)](https://www.gov.uk/government/statistics/taxi-and-private-hire-vehicle-statistics-england-2026/taxi-and-private-hire-vehicle-statistics-england-2026) figures as at 1 April 2026, published 13 August 2026
- [Private Hire Vehicle Operators and the change in legislation for the Tour Operators' Margin Scheme (HMRC)](https://www.gov.uk/government/publications/tour-operators-margin-scheme-change-in-legislation-for-private-hire-vehicle-operators/private-hire-vehicle-operators-and-the-change-in-legislation-for-the-tour-operators-margin-scheme) trip rates for 2024, published 26 November 2025
- [Private hire operator, non-standard (Manchester City Council)](https://www.manchester.gov.uk/online-directories/licences-and-permissions-directories/licensing/taxi-and-private-hire/private-hire/private-hire-operator) attachments including a business plan
- [Private hire operator, standard (Manchester City Council)](https://www.manchester.gov.uk/online-directories/licences-and-permissions-directories/licensing/taxi-and-private-hire/private-hire/private-hire-operator2) attachments including the fare tariff
- [Local Government (Miscellaneous Provisions) Act 1976, section 65](https://www.legislation.gov.uk/ukpga/1976/57/section/65) hackney carriage tables of fares
- [Local Government (Miscellaneous Provisions) Act 1976, section 55](https://www.legislation.gov.uk/ukpga/1976/57/section/55) the fit and proper test
- [How VAT applies to taxis and private hire cars, VAT Notice 700/25 (HMRC)](https://www.gov.uk/guidance/how-vat-applies-to-taxis-and-private-hire-cars-notice-70025) waiting time and baggage charges
- [Rates and thresholds for employers 2026 to 2027 (HMRC)](https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027) National Living Wage, employer National Insurance, Employment Allowance
- [VAT thresholds (GOV.UK)](https://www.gov.uk/how-vat-works/vat-thresholds) the £90,000 registration threshold
- [Complete a tax check for a taxi, private hire or scrap metal licence (HMRC)](https://www.gov.uk/guidance/complete-a-tax-check-for-a-taxi-private-hire-or-scrap-metal-licence) when it applies and the 120-day expiry
- [New proposals set out to reduce out-of-area working for taxis (Department for Transport)](https://www.gov.uk/government/news/new-proposals-set-out-to-reduce-out-of-area-working-for-taxis-and-boost-passenger-safety) consultation launched 8 January 2026
- [English Devolution and Community Empowerment Act 2026, section 108](https://www.legislation.gov.uk/ukpga/2026/23/section/108) commencement, excluding the taxi licensing chapter
- [Statutory Taxi and Private Hire Vehicle Standards (Department for Transport)](https://www.gov.uk/government/publications/statutory-taxi-and-private-hire-vehicle-standards/statutory-taxi-and-private-hire-vehicle-standards) safeguarding when booking and dispatch is outsourced
- [How much does taxi insurance cost in the UK? (SimplyQuote)](https://www.simplyquote.co.uk/insights/how-much-does-taxi-insurance-cost-in-the-uk/) private hire premium range

Dispatch AI is a trading name of CABO TECH SOLUTION AI LTD, registered in England and Wales, company no. 16255667.