Uber fares to rise in UK as 20% VAT rate is applied

Uber fares across the UK are to rise sharply from Monday night when VAT of 20% will be applied to rides booked via the app.

The change comes after a high court ruling last December that Uber could not be viewed as simply an agent but should be regarded as the contractor.

Uber said fares would have to rise. The additional VAT will be charged within the fare and not displayed to the passenger.

It is understood that Uber may effectively subsidise some fares, as a spokesperson said fare rises would vary from city to city, but refused to divulge further details on pricing on the grounds it was competitively sensitive.

App users have been notified on a change in the terms and conditions which will mean passengers contract directly with Uber, rather than the driver, from 11.59pm on Monday.

Other operators will be legally required to follow suit in London, although they have yet to confirm plans.