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.
Tax fraud vs. tax evasion… Look, we know the corporate scam: treat people like employees but pretend they aren’t to save money on taxes. It’s a scam, always has been, always will be, in my opinion.
Are you arguing that it isn’t a scam? Or are you arguing that scams like this are ethical? I’m curious.
Generally a scam is something done in secret, and if the government finds out exactly what the scammer is doing then the scammer can get in legal trouble. Here Uber is acting entirely out in the open, the government clearly wants to stop Uber, but writing a law that restricts Uber in the intended way appears to be difficult. (Maybe a law written strictly enough that Uber couldn’t work around it would also impact others that the government doesn’t want to target?) So I would argue that this is against the spirit of the law but it isn’t a scam.