What is Uber?
Uber is a mobile phone app which allows you to book a driver
whether you want to go shopping and come back home you need to pick your child
from school. The simple theory is that you don't want to use a conventional
taxi or cab. There are various types of Uber taxi service where the costs vary
The most obvious reason why it has become so popular not
only in the UK but several parts of the world is that it is much cheaper than
going with a black cab who can also use the bus lane. Some passengers say it is
not a fair play to allow the black cabs to use the bus lane when the others are
not allowed. Uber is now available in most cities in the UK
Are You A self-Employed Sole Trader?
Currently, all of Uber’s ‘ drivers also known as Uber
Partners as they call them are treated as if they are self-employed. However,
as everybody knows there was a recent court case where the judge said
otherwise, which will have massive implications on similar industries such as
Courier Riders and Drivers, Lorry and Truck Drivers and so forth.
Notwithstanding this recent ruling, if you are an Uber
Partner, you still have to think about a few basic expenses. Most of Uber
Partners do not call themselves as drivers as they do some other jobs in the
day time and Uber is allowing them to make some extra cash. Because of this
situational factors, most of the Uber partners might be employed as self-employed
at the same time. If they are employed, it is the usual practice that their
personal tax allowance (Currently £11,000 for 2015/16 and £11,500 for
2016/2017) is fully utilized on their employment income assuming that Uber
Partner is employed full time.
What Are Uber Partners’ Associated Costs?
Even though the following points are useful, this is not an
exhaustive list of costs and expenses that are available to every Uber Partner.
| → | Cost of Less than five years old Car | ← |
| → | Private Hire Vehicle licence (PHV). | ← |
| → | Costs may vary according to where you live. | ← |
| → | Cost of Medical Check Up | ← |
| → | Cost of Initial Test of Road Worthiness | ← |
| → | Cost of Repeat ‘MOT’ style tests every six months | ← |
| → | Cost of ‘fast track’ application | ← |
| → | Cost of Insurance | ← |
| → | Cost of public liability insurance | ← |
| → | Cost of Uber training if available such as Travelling and work wares | ← |
| → | Cost of Fuel | ← |
| → | Cost of Car Rentals | ← |
| → | Uber Service Charges | ← |
| → | Cost of Company phone with built in sat nav | ← |
Any VAT paid on the above expenses as you
are not VAT registered and as a result, VAT is part of your expenditure.
What Is Uber Partner’s Income Level?
Uber claims that on average drivers could make around £565 for
a 35-45 hour week, and that’s after it takes its 20% ‘service fee’. The new
drivers who sign up after April 24 2016 have to pay an increased fee of 25%. Some Uber Partners say it provides him with a full time wage
and they can easily take home around £700 for a 35 hour working week. If they do
more vigils, they can even make more than that, which is quire handsome in the
current UK job market conditions.
There have been complaints from drivers on chat forums about
the time spent waiting for fares. However, some Uber Partners say that they
have never waited.
Do the Uber Partners Need to File a Tax Return?
Irrespective of whether you are employed and/or
self-employed while working as an Uber Partner, you need to account for your
income and expenses on an annual tax return to HMRC. It might be the case that
you will not have to pay tax or will have to pay less tax if you are earning much
as a result of the availability of the personal tax allowance.