Fares charged to passengers for taxi or private hire journeys are liable to VAT at the standard rate. VAT is also charged on any additional charges for things like baggage and waiting time.
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A taxi receipt is a document that provides the taxi driver to the customer. This document is worked as proof that the passenger has paid the fare for the trip. Usually, the driver gives the receipt to the customer when they reach the destination.
Uber historically charged no VAT. It said it was just an app, with its drivers supplying the service to customers. As most drivers' income fell below the VAT threshold of £85,000, that meant Uber rides were free from VAT. That was challenged by HMRC in 2022, with Uber paying £615m.
Your Uber ProfileBe sure to provide us with a valid VAT-number (by adding it to your Tax Profile / Invoice Settings page) and to update your tax profile in the Uber App. Select the “Small Business Regime” option.
Cash-when a customer pays cash, the cabbie has enough money in hand to pay his or her lease, put fuel into their cab, and not have to worry about having enough cash to make change for other customers, or have to wait for the cab company to get around to cutting them a check.
It's easier to handle and manage cash compared to other modes of payment. Cash payments are immediate and there is no need to wait for the payment to be processed. Some taxi drivers may prefer cash payments to avoid paying fees associated with card payments.
Do Make Money as a Taxi Driver in the UK a Good Living? On average, taxi drivers in the United Kingdom earn between £20,000 and £30,000 per year. On average, taxi drivers in the United Kingdom earn between £9 and £15 per hour. However, the rate may increase on certain days, such as bank holidays and Saturday evenings.