Cabbies have demanded Chancellor Racheel Reeves close a tax loophole used by Uber.
Taxi drivers have written to the Chancellor asking her to make Uber pay the same level of VAT as black cabs, blaming lobbying efforts by the company for misleading the Treasury and the UK public on its perks.
The Licensed Taxi Drivers’ Association and the London & Eastern Cab Section have written a joint letter demanding that the Tour Operators Margin Scheme (TOMS), which allows travel companies to pay an effective VAT rate of five per cent, is closed to private car hires.
Cabbies, which have to pay the full 20 per cent VAT rate, have argued that Uber have exploited the tax loophole in an unfair way that has given the company an unfair advantage.
“Large multinational companies operating in the UK should contribute their fair share to the Exchequer.
“Closing the TOMS loophole would not only uphold tax integrity but also protect livelihoods and ensure competition is based on service, not tax avoidance.”
The association argued that some £1bn in extra revenue could be found at the Budget from closing the loophole, though Uber chiefs have said closing the loophole would lead to prices rising “dramatically”.
Bolt and Uber bosses have also sent letters to the Chancellor arguing the tax would “hit the most vulnerable people in society hardest” and lessen football across high streets.
Uber singled out for tax advantages
The war over the loophole has come as the Budget is expected to unveil measures in response to a consulation on applying VAT to all private hire vehicle journeys.
Steve McNamara of the Licensed Taxi Drivers’ Association told City AM that Uber had engaged in a “scare campaign” in the weeks leading up to the Budget.
“Drivers simply pay the tax that HMRC tells them is owed,” McNamara said.
“Uber for whatever reason have decided they’re above that.”
The Treasury and Uber did not respond to a request for comment.
It is just the latest public battle waged between cabbies and private hire giants including Uber.
Drivers have hit Uber with lawsuits on what it has deemed to be unlawful practices over the years.
The High Court is still reviewing black cabbies’ claim for £340m in damages over alleged wrongdoing between 2012 and 2019 involving a licence cabbies say was obtained unlawfully.