Overview
- From 2 January, the government barred online minicab firms from using the Tour Operators’ Margin Scheme, with London journeys now charged VAT because Transport for London requires operators to act as principal.
- HM Treasury says the reform will raise about £700 million a year and frames it as ending misuse of a niche rule intended for package travel.
- Uber and Bolt warn that passengers in London will face higher prices and drivers could see less work as the new VAT treatment bites in the capital.
- Outside London, Uber has shifted to an agency model that places the contract with the driver, leaving the platform’s commission subject to VAT while most drivers remain below the £90,000 registration threshold.
- The Licensed Taxi Drivers Association welcomes the move as a landmark step for fairness after years of disputes over differential VAT treatment.