Uber rewrites contracts with drivers to avoid paying UK’s new ‘taxi tax’
Uber has swerved paying millions of pounds to the UK exchequer under Rachel Reeves’s new “taxi tax” after the ride-hailing app rewrote contracts with its drivers,The move came as rules announced in November’s budget took effect, which adjusted how VAT is payable on minicab fares and would have resulted in the whole Uber fare becoming subject to the 20% sales tax,In November, Reeves told the Commons the changes would end up “protecting around £700m of tax revenue each year”,However, updated terms issued to Uber drivers from January 2026 mean the technology firm will act as an agent, rather than as the supplier, of transport services outside London,The move means drivers make a contract directly with their passengers – so they must charge any VAT due on the fare, while Uber only adds VAT to its commission.
As most drivers are not thought to be making more than £90,000 in bookings a year, and therefore do not have to charge VAT, the majority of Uber fares outside London will avoid becoming more expensive, since the 20% sales tax will not apply.The new contracts do not relate to London, where the agency model is not allowed under Transport for London rules.As a result, Uber passengers in the capital will pay VAT on their fares.Uber’s change to the terms with its drivers has been expected since the budget announcement.At the time, Andrew Brem, Uber’s regional general manager for the UK, said: “The government’s action today to change the rules will mean higher prices for passengers in London, and less work for drivers, when people are already struggling with the cost of living … This decision also establishes the absurd situation where a trip in London will be taxed at a different rate than a trip anywhere else in the UK.
”An HM Treasury spokesperson said: “Ending this use of a niche tax scheme by online minicab firms will both benefit everyday cabbies with a fairer tax system and raise money to help deliver the country’s priorities – cutting the cost of living, cutting waiting lists, and cutting debt and borrowing.”It did not say if Uber’s changes would affect its estimate of “protecting” £700m a year of receipts from the new policy.
Labour needs complete ‘reset’ to defeat Reform UK threat, says strategist
Keir Starmer does not have enough of a plan to defeat the “existential threat” that populism poses to UK democracy and should undertake a “fundamental reset”, New Labour’s former advertising strategist Sir Chris Powell has warned.Powell, who is the brother of Jonathan Powell, Starmer’s national security adviser, warned there were just three years to stop the “new and terrifying threat” of populists, suggesting Reform UK could represent a danger to democracy and national institutions.Writing for the Guardian, he said: “Here in the UK, where is the urgently needed counter plan on a huge scale, to thwart and head off such an existential threat? It is simply not in place, nor does it appear to be even at the planning stage.“We are at a very dangerous moment. We simply cannot afford to allow Reform UK to have a free run, and become established and entrenched as a credible potential government in the minds of disenchanted voters
‘They misjudged Caerphilly’: how the Reform juggernaut backfired in Welsh byelection
Yuliia Bond works two jobs, raises two children and is studying at university. In the autumn, she also found time to take on Reform UK when it tried to win the Caerphilly byelection.Bond, a Ukrainian refugee who has settled in south Wales, said she could not remain silent as Reform tried to win the seat in the Senedd (Welsh parliament ).“Members of our Ukrainian community spoke up,” Bond said. “We challenged the disinformation because we didn’t want our neighbours to be misled into resenting us
Keir Starmer to woo voters and MPs with new year plan to cut cost of living
Keir Starmer will attempt to rescue his relationship with disillusioned voters and his own fractious MPs in a new year push to reduce the cost of living.The prime minister will give a speech in the coming days focusing on how his government is bringing down living costs, highlighting recent cuts to energy bills and interest rates and the end of the two-child benefit cap.He will reinforce the message with a series of new year drinks receptions for Labour MPs at Chequers as he hopes to dispel angst about local and devolved elections in 2026, at which the party is expecting heavy losses.In his new year message, the prime minister said voters would begin to see their lives improving in 2026 in what his chief adviser, Morgan McSweeney, has called “the year of proof”.Starmer said: “In 2026, the choices we’ve made will mean more people will begin to feel positive change in your bills, your communities and your health service
UK ministers accused of ‘embarrassing failures’ in Abd el-Fattah case
The government could have avoided “embarrassing failures” in the case of Alaa Abd el-Fattah by having a special envoy deal with complex cases involving Britons detained abroad, Emily Thornberry has said.The chair of the Commons foreign affairs committee criticised “serious shortcomings” in information sharing, which she said could have been resolved by having a dedicated official carry out background checks.Former foreign secretary David Lammy said in 2024 that the government would appoint an envoy to deal with “complex detention cases” involving Britons abroad but no such figure has been named.In a letter to the foreign secretary, Yvette Cooper, Thornberry said: “Had an envoy been established [in 2024] … it is clear to me that such embarrassing failures of due diligence and information sharing would have been avoided.“It would have been firmly within the envoy’s remit to carry out appropriate background and social media checks
Greens’ Polanski prepared to work with Burnham but not Starmer ‘to stop Reform’
The Green party leader, Zack Polanski, has said he would refuse to work with Keir Starmer but could work with Andy Burnham, Starmer’s potential rival for the Labour leadership, to keep Reform out of power.Polanski said he would not enter a political partnership with Labour under the current prime minister, but would consider it if the mayor of Greater Manchester took the helm.He told the Financial Times: “I could see the potential to work with Andy Burnham to stop Reform and to challenge the rise of the far right. I would rule it out with Keir Starmer, but I wouldn’t rule it out with Burnham.”A coalition would require the Greens getting an adequate number of seats at the next general election to make the party useful to Labour, and would also need Burnham to once again gain a seat as an MP
Zack Polanski offering voters fantasy solutions, says head of Fabian Society
The Green party leader, Zack Polanski, is offering voters “unicorns” and Labour must confront his “fantasy” solutions such as the idea that a wealth tax would fix the public finances, according to the Fabian Society’s general secretary, Joe Dromey.Much of the government’s fire is trained on Nigel Farage. But in an end-of-year interview, the head of Labour’s internal thinktank urges his party to take on the “twin populisms” of Reform and Polanski.“We’ve got the populism of the left in Polanski. And the populism of the right in Farage
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