Quote:
Ministers will now consult on the level of this threshold, but have put forward £50m as their preferred option.
There will be a handful of operators very disturbed about this, and many thousands doing a dance of joy.
| Taxi Driver Online http://www.taxi-driver.co.uk/phpBB2/ |
|
| Chancellor launches new £425m Uber tax http://www.taxi-driver.co.uk/phpBB2/viewtopic.php?f=2&t=43046 |
Page 1 of 1 |
| Author: | Sussex [ Sun Nov 01, 2026 5:59 pm ] |
| Post subject: | Chancellor launches new £425m Uber tax |
Chancellor launches new £425m Uber tax https://www.telegraph.co.uk/business/20 ... -uber-tax/ Taxi-hailing app company accuses the Government of creating a ‘two-tier’ system Ministers have mounted a £425m tax raid on ride-hailing firms including Uber. John Healey on Wednesday outlined plans to make private-hire vehicle operators liable for VAT on the entire value of their fares. The companies currently only pay the tax on the commission they earn, which is a fraction of the overall passenger bill. The Treasury said: “The private hire vehicle market has grown and changed rapidly in recent years, highlighting inconsistencies in tax treatment between larger operators. “This Budget ends this inconsistency by making larger operators liable for VAT on their full fare, in line with other goods and services, while protecting smaller operators.” In response, Uber accused the Government of creating a “two-tier” tax system and warned of higher prices for passengers. A spokesman said: “Any changes must be fair to all passengers and drivers. “While we await the full details of the Government’s proposals, we are concerned they could create a two-tier tax system and make essential journeys less affordable for riders who need them most.” It will be up to the ride-hailing firms to decide whether they pass on the higher tax burden to customers. However, the threat of higher fares will deal a blow to the Chancellor’s pledge to deliver “breathing space” for British households struggling with the soaring cost of living. The full 20pc VAT rate will be applied from the beginning of 2028 to private-hire operators with an annual fare turnover above a certain level. Ministers will now consult on the level of this threshold, but have put forward £50m as their preferred option. The move is forecast to raise £425m for the Treasury by 2031, making it one of the most significant revenue raisers for the taxman in this year’s Budget. The fresh crackdown on ride-hailing firms and minicab companies follows a long-running dispute over how much tax they pay. Rachel Reeves, the former chancellor, attempted to extend VAT to full fares in last year’s Budget. The move, dubbed a “taxi tax” by critics, was expected to raise £700m for the public finances but triggered warnings about rising fares. However, Uber swerved the measures by changing its contracts to shift liability for VAT onto drivers. Under the agency model, Uber effectively acts as a booking agent while the drivers contract directly with passengers, making them liable for VAT. This limits Uber’s contribution to the taxman to VAT paid on its commission – typically 25pc of the total fare. It also reduces takings from drivers, who are only liable to pay VAT when they make more than £90,000 in bookings in a year. The altered contract does not apply in London, where the agency model is banned under Transport for London rules. Uber had been locked in a legal dispute with HMRC over its VAT liabilities, but ultimately won the right to use the agency model outside the capital following a Supreme Court ruling. The closure of the loophole is expected to trigger a significant increase in the tax bill owed by Uber, which is thought to make just under half its £5.2bn in UK revenues outside London. Major rivals such as Bolt, Freenow and Addison Lee will also face higher taxes. Danny O’Gorman, the general manager of Freenow, said: “We will be reviewing the details of the Government’s proposed changes to the private hire operating model outside of London, having already transitioned to the principal model in the capital. “It is vital that any new regulation provides a level playing field, and critically protects passenger affordability and driver livelihoods.” |
|
| Author: | Sussex [ Sun Nov 01, 2026 6:01 pm ] |
| Post subject: | Re: Chancellor launches new £425m Uber tax |
Quote: Ministers will now consult on the level of this threshold, but have put forward £50m as their preferred option. There will be a handful of operators very disturbed about this, and many thousands doing a dance of joy.
|
|
| Author: | StuartW [ Mon Nov 02, 2026 7:10 am ] |
| Post subject: | Re: Chancellor launches new £425m Uber tax |
So the £50million threshold figure will refer to total turnover in fares, then? Maybe as a ballpark figure you could say a car on a PH circuit takes £1,000 per week in fares, or say £50,000 turnover per annum for easy counting. (That may sound quite a lot, particularly since many drivers won't be doing that kind of hours, like the semi-retired day drivers. On the other hand, lots of cars are double-shifted etc.) But the £50k yearly turnover per car equates nicely to 1,000 cars generating the Government's proposed threshold figure of £50million  So obviously Uber blows a hole in that. And according to Google Bolt has 100,000 drivers signed up in the UK. Find that a tad hard to believe, but of course a lot of drivers will work across Uber and Bolt, and perhaps legacy platforms at the same time. Of course, that would split their turnover across two or more platforms, but surely safe to say Bolt also blows a huge hole in the £50million figure. But which legacy platforms might have around 1,000 cars or drivers. (Bearing in mind this is just a very rough ballpark figure, just to give an idea of the kind of circuits that might be caught out.) According to Google AI, Veezu is probably the biggest platform also using telephone calls, and has something like 12,000 cars. Addison Lee something like 5,000. Delta has 2,000, according to Google. (Google AI also says this - oh, my aching sides  "Note: Ride-hailing giants like Uber operate under different local licensing frameworks and are typically excluded from conventional operator league tables like the ProDriver 100.") Then there's the likes of Take Me and DG. I think the former would be comfortably over, but not so sure about the latter. Then there's the school run mob - can't even remember the name now, and it would be interesting to know if they would come within the target market the Government are looking at But other than that there are quite a few who will maybe not quite have 1,000 cars, but must be up and around the £50million turnover figure. According to older figures, Alpha Cars in Liverpool have around 1,300 cars, while the likes of Boro Cars have around 800, and Argyle Satellite on the Wirral have 775. |
|
| Author: | StuartW [ Mon Nov 02, 2026 7:11 am ] |
| Post subject: | Re: Chancellor launches new £425m Uber tax |
Note that the Google AI thing mentions the Professional Driver magazine tables, which seem to list the 100 biggest circuits. Google keeps on throwing this up from 2019, but which is obviously well out of date, particularly when you consider that a lot of those circuits like Go Carz, Dragon Cars and Amber in Leeds are now part of Veezu. https://www.prodrivermags.com/2019-prod ... gh-market/ Think I've got more up-to-date stats from Pro Driver on my hard drive somewhere, but it's not a publication I'm reading all the time, and can't be bothered looking for it just now  But, anyway, at a very rough guess I'd say the number of circuits who would be caught out by the suggested £50million VAT threshold might just be a handful, or at least countable on both hands. Or maybe a couple of dozen at the very most. Or I could just be totally wrong 
|
|
| Page 1 of 1 | All times are UTC - 1 hour [ DST ] |
| Powered by phpBB® Forum Software © phpBB Group http://www.phpbb.com/ |
|