Confused about VAT on Uber? Whether you’re a driver wondering if you need to register or a business owner trying to reclaim VAT on rides, the rules can feel complicated. If you’re unsure about how VAT on Uber affects your earnings or expenses, here’s what you need to know.
Key Takeaways
Uber charges 20% VAT on fares in the UK, but drivers only need to register for VAT if their total income exceeds £90,000 per year.
VAT-registered businesses and freelancers can reclaim VAT on Uber rides used strictly for business purposes, provided they have a valid Uber VAT invoice.
Do Uber Drivers Need to Register for VAT?
Many drivers wonder, "Is there VAT on Uber UK?". The short answer is yes - Uber charges 20% VAT on fares in the UK. But does that mean Uber drivers need to register for VAT themselves?
Short answer: Only if you earn over £90,000 a year.
If your total annual income (from Uber and other work) is under £90,000, you don’t need to register for VAT. Uber already adds VAT to fares, so you don’t handle it yourself.
If you earn over £90,000, you must register for VAT and charge 20% VAT on your services. This means submitting VAT returns and keeping records.
You can register voluntarily (even under £90,000) if you want to claim VAT back on expenses like fuel and maintenance, but you’ll also need to charge VAT.
RECOMMENDED READING: Do You Pay VAT on the First £85000? Here’s What HMRC Says!
What this means for you:
If you’re not VAT-registered, Uber handles VAT, and you don’t need to do anything.
If you are VAT-registered, you’ll need to keep track of VAT payments, expenses, and ensure you use your Uber VAT number for tax reporting.
Can Businesses & Freelancers Claim VAT on Uber Rides?
Can I claim VAT on Uber trips? Yes, businesses and freelancers can claim VAT on their Uber rides if they are VAT-registered and using Uber for business trips only.
Keep in mind that Uber charges 20% VAT on fares in the UK, and VAT-registered businesses can reclaim this if the ride was for work.
However, you need an Uber VAT receipt - your regular trip receipt won’t work. You can download a proper Uber VAT invoice from your Uber account.
Pro Tip: If you’re using Uber regularly for work, set up an Uber for Business account to automatically get VAT invoices.
What We Think
For Uber drivers, the change hasn’t brought many benefits. Uber charges VAT on fares, but drivers don’t get to reclaim VAT on their earnings. Those who cross the £90,000 VAT threshold have to register and deal with extra paperwork, which can be stressful.
For businesses and freelancers, VAT can be reclaimed - but only if they’re VAT-registered. Those who aren’t, end up paying more for Uber rides than before.
The real issue isn’t just VAT - it’s the lack of clarity many people face when trying to navigate tax rules. Many Uber drivers don’t realise when they need to register, and small businesses often miss out on reclaiming VAT because they’re unaware of the process.
How JAFA Can Help
VAT rules can be confusing, and getting them wrong could cost you money. We make it simple for you.
We help you track earnings, so you know when to register for VAT and avoid surprises. If you’re already VAT-registered, we simplify VAT returns, tax deductions, and expense tracking to ensure you don’t overpay.
For business-related Uber rides, we ensure you have proper VAT receipts and records so you can reclaim VAT without hassle.
Contact our expert accountants based in Birmingham, UK, either by booking a FREE discovery call or calling us on +44 121 227 6277.
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