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Uber and the VAT man
Roland Perry wrote:
In message , at 17:31:04 on Wed, 22 May 2019, JNugent remarked: On 22/05/2019 10:01, Roland Perry wrote: on Wed, 22 May 2019, JNugent remarked: On 21/05/2019 18:01, Roland Perry wrote: JNugent remarked: With Uber (which I have used only twice, neither time in the UK), theÂ* charges are payable to Uber. If UK VAT applies to their chargesÂ* in theÂ* UK, it will have to be paid to Uber, presumably at 20% ofÂ* the charge.Â* How Uber divide up the charge (ex-VAT) is up to them,Â* but all of itÂ* will be liable to the tax if any of it is. Â*The theory is that with taxi drivers below the £85k VAT limit, theyÂ* can't charge their riders VAT. That's taxi-driving for you. With Uber, the charge is not paid to the driver (and the drivers are not taxi-drivers just as the cars are not taxis). The rider's sole contract is with Uber itself. Â*Unless Uber is an agency and you are booking with the successfully bidding driver, and as part of the agency agreement Uber pass your moneyÂ* to them. Separately charging the driver a commission. You have more or less described what we might call a "traditional minicab" (traditional since 1960, that is). The driver gets paid by the passenger and the driver pays a commission or radio circuit rent to the operator. The operator's turnover consists of the aggregate of the radio rent commissions paid to them by the drivers. But it definitely isn't what happens with Uber. There, the passenger pays Uber, and Uber pays a part of the charge to the driver. Alternatively, the Uber pays [on paper] the whole charge to the driver, but registers the fact that a commission is due, and at the end of the day (or week or month or whatever their accounting period is) deducts one from the other before handing over the *cash*. Is that what happens? My impression is that Uber's accounting model is open and available and matches what I suggested. All of the turnover, irepective of how it is subsequently disbursed to the accounts of drivers or to any other recipient, is Uber's turnover. Does that mean Uber gets all of the "surge pricing", or does some get fed through to the driver? From driver anecdotes I think they do get a wedge (because they arrange their shifts to be available at such times). Yes, the surge pricing is designed to encourage more drivers to be available to cope with increased demand. So the drivers certainly get a big chunk of the higher price, perhaps even more than of the normal charge. After all, if Uber is simply a matching service, its costs don't double if demands are higher. As an aside, we know Uber subsidises drivers in some cases, paying them more than it collects from the customers. I think this again suggests that the drivers are closer to being employees than independent contractors merely linked through Uber's matching service. *All* of the money is therefore part of Uber's turnover. And that's before a penny of it reaches the driver, the driver merely being one of Uber's overheads. As this is a railway group, is the turnover of a booking site like Trainline the whole of the fares they sell, or just the what? 9% commission they get paid. Uber do not get paid a commission of any percentage whatsoever. They pay their drivers a commission / proportion / share of the turnover. This page says they take 25% commission: https://www.uber.com/en-GH/drive/resources/payments/ The only money the driver receives is from Uber. Even a tip if the passenger decides to add one to Uber's charges. Less perhaps a small handling fee from Uber - the 25% mentioned above? From what I've read, Uber passes on the whole tip to the driver. |
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