VAT on UBER fares

The current position regarding VAT on UBER fares, is a good illustration of how complex VAT can be.

Following a series of tribunal cases and appeals, UBER now charges VAT using the Tour Operator Margin Scheme (TOMS) in London. This means that 20% VAT is only charged by UBER on its margin (that is after deducting the amounts paid to the driver). Use of the TOMS means that no input VAT can be recovered by the customer.

Outside of Lonodon UBER apparently charges VAT under the standard VAT scheme, of 20% on the full selling price.