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.
I’m not saying that taxes are bad. I’m saying that if the government says “there’s a new tax you have to pay if you do that” and you say “ok, then I won’t do that,” you have done nothing wrong. You have a duty to obey the law, but no duty to maximize government revenue.
Oh yeah, totally not wrong to change the legal definitions of your contracts the day new legislation comes out designed to claw back the taxes you have been avoiding the whole time without that new legislation.
Can you please take your corporate ski poling else where?