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From January 2026, changes to UK VAT rules — and Uber’s response to them — are affecting how VAT is charged on taxi and private-hire journeys. Many VAT-registered businesses are now asking a simple but important question:

Can we still reclaim VAT on Uber used for staff travel?

The answer is: sometimes — but not always, and it now depends heavily on where the journey takes place and what appears on the receipt.

This article explains what’s changed and what your business needs to do.

What has changed?

The government has closed a long-standing VAT loophole by removing taxi and private-hire journeys from the Tour Operators’ Margin Scheme (TOMS). Historically, some ride-hailing platforms accounted for VAT only on their margin rather than the full fare.

As a result, Uber has revised its driver contracts and operating model:

🚕 Uber’s new “agency” model (outside London)

• Uber now treats itself as a booking agent, not the supplier of the journey.
• The driver is treated as supplying the transport service directly to the passenger.
• Most drivers earn below the £90,000 VAT registration threshold, so they are not VAT-registered.
• Therefore, no VAT is charged on the fare itself in most cases.

🚖 London is different

• Transport for London does not permit the agency model.
• Uber remains the principal supplier for London journeys.
• As a result, Uber must charge 20% VAT on the full fare in London.

What does this mean for VAT-registered businesses?

VAT can only be reclaimed if VAT is charged

HMRC only allows VAT recovery where:

• VAT is actually charged, and
• The business holds a valid VAT invoice or receipt.

If there is no VAT shown, there is nothing to reclaim, even if the cost is wholly business-related.

When CAN your business reclaim VAT on Uber?

✔️ London journeys

• Uber remains VAT-registered and charges VAT on the full fare.
• If the receipt clearly shows:
  • 20% VAT
  • Uber’s VAT number
  • The VAT amount
    then VAT-registered businesses can reclaim the VAT (subject to normal business-use rules).

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✔️ Any Uber receipt showing VAT

Always check the receipt rather than assuming.

• If VAT is shown, it is generally reclaimable for business travel.

When CANNOT your business reclaim VAT?

Most Uber journeys outside London

• The driver is treated as the supplier.
• The driver is usually not VAT-registered.
• No VAT is charged on the fare.
• Result: no reclaimable VAT, even though the expense is allowable for corporation tax.

Receipts without VAT

• If the receipt does not show VAT separately, HMRC will not allow a VAT reclaim.

Practical steps for businesses

Check Uber receipts carefully

• Do not assume VAT applies.
• Look specifically for a VAT amount and supplier VAT number.

Use Uber Business Profiles

• Ensure staff use the company’s business profile in the Uber app.
• This improves invoice quality and audit trail.

Train staff and finance teams

• Staff should understand that:
  • Some trips will include VAT
  • Some will not
• Finance teams should only reclaim VAT where it is clearly shown.

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Final takeaway

• London Uber journeys: VAT usually charged → VAT can be reclaimed
• Most UK Uber journeys outside London: No VAT charged → nothing to reclaim
• Always rely on the receipt, not assumptions

If your business has significant staff travel costs, this change could quietly reduce VAT recovery — and it’s important your bookkeeping and VAT returns reflect the new reality.

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