Overview
- HM Treasury has excluded private-hire services from the Tour Operators’ Margin Scheme, a budget move forecast to raise about £700 million a year.
- Uber has adopted an agency model for trips outside London, paying VAT only on its commission and shifting liability to drivers who typically remain below the £90,000 VAT registration threshold.
- Transport for London requires operators to act as principal, so the full 20% VAT now applies to entire fares in the capital.
- Uber and Bolt say the change will increase prices for London passengers and could reduce available work for drivers.
- Black cab representatives call the policy a landmark for fairness, though Uber’s contractual shift outside London could reduce the government’s expected tax take.