Revealed, Uber’s £40 million tax loophole: Taxi firm registers each of its drivers as a separate business to avoid paying VAT on booking fees

‘Uber was last night accused of exploiting a loophole to avoid paying millions in tax that helps it undercut rivals.
It was claimed that HMRC has missed out on about £40million in VAT from the controversial taxi app thanks to the legal but highly controversial tactic.
Ride-hailing apps are meant to pay 20 per cent VAT on booking fees they collect from drivers on each fare. But Uber avoids this by treating its 40,000 UK drivers as separate businesses, as most earn less than the £85,000 a year threshold for VAT registration.
This enables the American firm to offer cheaper fares than both traditional taxi firms and rival app-based services, while depriving the Treasury of millions of pounds in tax.’
Read more: Revealed, Uber’s £40 million tax loophole: Taxi firm registers each of its drivers as a separate business to avoid paying VAT on booking fees