this post was submitted on 02 Jan 2026
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Uber has swerved paying millions of pounds to the UK exchequer under Rachel Reeves’s new “taxi tax” after the ride-hailing app rewrote contracts with its drivers.

The move came as rules announced in November’s budget took effect, which adjusted how VAT is payable on minicab fares and would have resulted in the whole Uber fare becoming subject to the 20% sales tax.

In November, Reeves told the Commons the changes would end up “protecting around £700m of tax revenue each year”.

However, updated terms issued to Uber drivers from January 2026 mean the technology firm will act as an agent, rather than as the supplier, of transport services outside London. The move means drivers make a contract directly with their passengers – so they must charge any VAT due on the fare, while Uber only adds VAT to its commission.

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[–] mjr 5 points 6 days ago (1 children)

Won't drivers only need to collect VAT if they are VAT registered, which means taking more than some number of thousands of pounds? At which point, presumably they tick a box in the uber driver app and it makes them 20% more expensive.

[–] SinningStromgald@lemmy.world 10 points 6 days ago (1 children)

The article says £90k or more requires VAT registration and that most drivers are not earning that much. Even so I would still like to know how, theoretically, this VAT is to be charged and collected in the current app.

[–] valkyre09@lemmy.world 11 points 5 days ago

So rather than Uber being above the £90k limit collectively. They’re basically allowing each driver to be a contractor who had their own £90k entitlement? Bloody hell that’s not a loophole, that’s a channel tunnel!