Uber Self assessment tax return

nutrit

Hello, i am self employed as an uber driver, started last year.

Now i have to complete my self assessment tax return, and i have a question

On my business turnover should i declare the amount before 25% fee of uber, and declare fee as an expense, or should i declare the actual money i received on my bank account after uber fee.

For example:

Let's presume that i had only one trip of 10 Gbp fare, from which Uber takes 2.5 Gbp fee (25%), and i receive 7.5 Gbp in my bank account.
In this case should i declare business turnover 10 Gbp and allowable expense 2.5 Gbp,
Or should i declare 7.5 Gbp as my business turnover. Thank you

Pennywise

The former is the right way to declare.

TheCyclingProgrammer

Normally you shouldn’t net off your expenses so as Pennywise says your turnover would be before taking off the fee from Uber...however: I would say it does depend slightly on the contractual arrangements.

If the arrangement is that Uber charges the customer £x and they then pay you 75% of this amount for your services then IMO you should simply declare what you’ve been paid as your turnover.

If the arrangement is that you’ve charged the customer £x with Uber acting as an agent and Uber have charged you 25% of this amount as their agent fee, then you would report your turnover as £x and the fee as an expense.

It’s probably a good idea to figure this out as it can have an impact on if and and when you may need to be VAT registered.

TheCyclingProgrammer

Further to my previous post, I’m not sure there is currently a simple answer to this.

I believe that Uber’s position is that they are acting as an agent which would mean you would declare the full charge to the customer as turnover and their fee as an expense.

This would also make you responsible for accounting for any VAT on the full charge if you cross the registration threshold and have to become VAT registered.

Of course the way Uber operates is currently being challenged and so is their status as agent vs principal so it’s all up in the air.

https://www.rsmuk.com/ideas-and-insights/weekly-tax-brief-1-november-2016/uber-and-the-charge-to-vat

At the end of the day, if you’re below the VAT threshold then it makes no difference to your tax bill how you account for this and I would err towards treating the Uber fee as an expense.

nutrit

I am below the VAT threshold

nutrit

I should add an known fact that Uber deals with customers first hand, uber bill them etc, not me

TheCyclingProgrammer

Ok, I think you still need to treat the whole supply charge before Uber’s fee as your turnover. Just because Uber bill the customer doesn’t mean they aren’t acting as an agent. Right now, until there’s a definitive ruling on whether Uber are acting as a principal or agent I would treat it as if they were an agent.

Don’t forget under VAT rules, as Uber’s based in the Netherlands, the fees they have charged you have to be included when calculating your taxable turnover for the purposes of the VAT threshold, as their fees would normally be accounted for as a reverse charge supply.

https://www.accountingweb.co.uk/any-answers/vat-on-uber-income

Something to bear in mind if you are close to the threshold. If Uber’s fee is always 25% then that means you will breach the threshold when your actual turnover from the fares is £68k, not £85k.

nutrit

Thank you all for your responses. I have asked HMRC customer support via Twitter and the reply was : "Sorry for the delay. You should record the amount before the fee in the turnover figure and claim the Uber fee as an expense. ^DK"

So the answer is obvious, this may help anybody who might be interested