Uber has sidestepped paying millions of pounds in UK tax under the newly introduced 'taxi tax' by rewriting contracts with drivers, effectively shielding itself from a 20% sales tax on fares. The ride-hailing giant's move was seen as a calculated ploy to avoid a significant hit to its profits after the government announced plans to adjust how Value Added Tax (VAT) is payable on minicab fares.
According to the UK Chancellor, Rachel Reeves, the changes would have resulted in an estimated £700m of tax revenue each year for the government. However, Uber's revised terms with drivers mean that they will now be responsible for charging any VAT due on fares, while the company only adds VAT to its commission. This shift means that most rides outside London will no longer incur a 20% sales tax.
The changes apply to drivers operating outside of London, where the agency model is not allowed under Transport for London rules. As such, Uber passengers in the capital will continue to pay VAT on their fares. The move has been described by some as "absurd," with the UK's regional general manager for Uber, Andrew Brem, stating that it creates an unfair situation where trips in London are taxed at a different rate than those in other parts of the country.
The government has welcomed the changes, claiming they will benefit drivers and raise money to help deliver key priorities. However, some have questioned whether the actual impact of the new policy will be as significant as initially estimated.
According to the UK Chancellor, Rachel Reeves, the changes would have resulted in an estimated £700m of tax revenue each year for the government. However, Uber's revised terms with drivers mean that they will now be responsible for charging any VAT due on fares, while the company only adds VAT to its commission. This shift means that most rides outside London will no longer incur a 20% sales tax.
The changes apply to drivers operating outside of London, where the agency model is not allowed under Transport for London rules. As such, Uber passengers in the capital will continue to pay VAT on their fares. The move has been described by some as "absurd," with the UK's regional general manager for Uber, Andrew Brem, stating that it creates an unfair situation where trips in London are taxed at a different rate than those in other parts of the country.
The government has welcomed the changes, claiming they will benefit drivers and raise money to help deliver key priorities. However, some have questioned whether the actual impact of the new policy will be as significant as initially estimated.
Uber's move is a big win for their bottom line... I mean, who doesn't love tax avoidance? It's like they found a loophole and just went with it. 
The fact that most rides outside London won't have to pay 20% VAT is a nice little bonus for them, but it's not exactly transparent. They're basically shifting the responsibility onto drivers, which sounds unfair to me. I guess you could say they're making themselves out to be the 'VAT heroes' while drivers are just 'tax payers'. 
. But the thing is, we gotta be aware of what's going on around us, just like drivers gotta be aware of how much they're getting paid and whether they're being treated fairly 
. I mean, if you're gonna play by different rules, you gotta be ready to pay the price, right? It's all about the benjamins, ain't it? 
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! According to a recent report, Uber's market share in the UK has been steadily increasing over the past year - 63% of minicab fares are now booked through Uber's platform 
. meanwhile, did u know that the UK government is expecting to raise around £700m per year from taxing Uber fares? 
. i mean, i get where Uber is coming from - they don't wanna take a hit to their profits 
. and on the bright side, the gov is saying this will benefit drivers more... let's see how that plays out 
that Uber can just rewrite their contracts like this! I mean, come on, 20% sales tax is a big chunk of change 
. Back in my day, we didn't play those kinds of games with our taxes. We just paid up and were done with it 
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