Uber likely to start charging VAT on rides after UK ruling
Uber has said it may soon have to start charging its UK customers VAT at 20%, after a High Court judgement, pushing up the cost of rides.
It could have far-reaching consequences for the industry and Uber said it expected others to follow suit. At the time, Lord Justice Leggatt suggested this ruling meant that a private hire operator such as Uber had to enter into a contract with its customers when it accepted a booking, rather than the passenger only having a contract with the driver of the vehicle.Unlike most private drivers, Uber is a VAT-registered business, so this would oblige the ride-hailing firm to start charging the tax.
"All operators will need to carefully consider the court's judgment and take steps to ensure that they comply with it, including considering whether any changes to their way of working are required," he added.The case referred to the Private Hire Vehicles Act 1998 which only applies in the capital, but Uber and the App Drivers and Couriers Union, which was a defendant in the case, both expect the ruling to be followed by licencing authorities across the UK.
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