Reply To: Addison Lee slaps 20% on top of prebooked fares (!)

[memesweeper]

Sad to hear your fare is going up, but there is a good reason for this.

Conventional cab firms just put you in touch with a driver, who charges you. Provided the driver doesn’t exceed the VAT threshold, there’s not VAT to pay. The driver pays the cab firm a fee (typically a radio rental) which is VATable.

New style apps like Uber you pay the app operator, who skim a percentage, and then pay the driver what’s left. They have huge turnovers and are undoubtedly inscope for VAT and should be charging it. They engaged in a “legal fiction” where they pretended the customer was dealing directly with the driver, which was obviously nonesense. I’m glad the loophole is closed, even if I end up paying more for my journeys as a result.