VAT for gig workers: the £90,000 threshold

Summary

For 2025-26, most UK gig workers will never need to register for VAT because the £90,000 VAT-registration threshold is far above typical Uber, Deliveroo and Amazon Flex takings, and Uber being VAT-registered on its own fees does not automatically drag drivers into VAT.

Your own VAT position is based on your taxable turnover (what you charge for your own supplies), and for most app drivers that means the net amount you receive from platforms, not the rider's full fare. Voluntary VAT registration or Flat Rate Scheme almost always makes a gig worker worse off.

If you ever genuinely cross the £90,000 threshold across multiple platforms, you must register within 30 days and start charging VAT properly; waiting for "HMRC to spot it" is how people end up with horrendous back-dated VAT bills and penalties.

Key facts (UK 2025-26)

• From 1 April 2024, the VAT registration threshold is £90,000 of taxable turnover in any rolling 12-month period; that same threshold applies in the 2025-26 tax year.
• The deregistration threshold is £88,000, also from 1 April 2024.
• "Taxable turnover" means the total value of what you sell that is standard-, reduced- or zero-rated for VAT, excluding anything that is exempt.
• If your taxable turnover goes over £90,000 in any rolling 12 months, you must notify HMRC and register for VAT within 30 days of the end of the month in which you crossed it.
• For private-hire journeys (including mini-cabs), HMRC VAT Notice 700/25 says the fares a driver charges passengers are standard-rated for VAT, but whether you must charge VAT depends on if you are VAT-registered.
• For 2025-26, Uber itself is VAT-registered and accounts for VAT on qualifying fares; drivers are still treated as making their own supplies to Uber or passengers, but most remain below £90,000 and outside VAT registration.
• Under the VAT Flat Rate Scheme (FRS), the typical flat rate for "transport and storage, including couriers" is about 10% of VAT-inclusive turnover, with a one-year 1% discount for new registrations; if your goods spend is too low you can be forced onto the "limited cost trader" rate of 16.5%.
• For 2025-26, nearly all part-time riders and most full-time single-platform drivers sit well below £90,000, so VAT registration is usually a trap, not a benefit.

Legislation, case law, regulation

• Value Added Tax Act 1994 (VATA 1994): main VAT statute; Schedule 1 sets registration thresholds, updated by regulations to £90,000 from 1 April 2024.
• VATA 1994, Schedule 1, "Registration in respect of taxable supplies": defines compulsory registration when taxable turnover exceeds the threshold.
• HMRC VAT Notice 700/25, How VAT applies to taxis and private hire cars: explains that taxi and private-hire fares are subject to VAT at the standard rate where the driver or operator is VAT-registered.
• HMRC VAT guidance, When to register for VAT: GOV.UK page setting out the £90,000 threshold and 30-day rule.
• VAT Flat Rate Scheme regulations and HMRC guidance: provide flat-rate percentages by sector, including transport and storage / courier services.

How it actually works

1. When does a gig worker have to think about VAT?

You only have to register for VAT if your own taxable turnover goes over £90,000 on a rolling 12-month basis, or you genuinely expect to go over it in the next 30 days.

For a gig worker this means:

• adding up all your taxable self-employed sales: Uber, Bolt, private-hire apps, Amazon Flex, Deliveroo, Just Eat, Stuart, Gophr, and any other self-employed work (not just one platform);
• ignoring wages where you are on PAYE (that is employment income, not VATable turnover);
• looking at any 12-month window, not just tax years (for example June to May).

A full-time driver on £42,000 from Uber and £8,000 from Deliveroo is still at £50,000, well below the VAT line. You need to be at roughly two busy full-time drivers' level before VAT becomes a serious risk.

2. Gross fare vs net payout, what counts for VAT threshold?

This is the big confusion.

HMRC's rule is that the VAT threshold test uses your taxable turnover: what you are supplying.

In practice, for most app-driving arrangements in 2025-26:

• Uber is VAT-registered and accounts for VAT on the fare to the passenger, treating itself as the supplier of the transport;
• the driver's income is the net amount Uber pays the driver (after Uber's cut and VAT on that cut), not the gross passenger fare.

So:

• Threshold for you: generally based on the net payouts from Uber and other platforms (your self-employed turnover).
• The VAT added on top by Uber to the passenger is Uber's problem, not your turnover.

For Deliveroo / Amazon Flex where the legal structure can vary, what still matters is the contract and who supplies what to whom. But for a self-employed driver or rider, in 2025-26 your turnover is the money you earn, not the customer's gross payment after platform mark-ups.

If in doubt, use the turnover figure you put on your Self Assessment (SA103) as your starting point for VAT-threshold monitoring.

3. Uber's VAT status vs your VAT status

Uber being VAT-registered does not:

• automatically register you for VAT;
• mean you can claim VAT back unless you yourself are VAT-registered;
• change your VAT threshold (still £90,000).

What it does mean:

• Uber may show VAT on its service fee in its tax documents;
• you see lower net payouts compared with pre-VAT-on-fares setups;
• some of what customers pay is going to HMRC, but through Uber, not through you.

From your point of view, until your own turnover hits the £90,000 threshold, VAT is mostly just some of your customer's money being skimmed by the platform and the government before you see anything.

4. Voluntary VAT registration, why it's rarely worth it

You can choose to register for VAT even if you are under £90,000, but for gig workers this is almost always a bad deal:

• Your "customers" (Uber passengers, Deliveroo customers, Amazon Flex parcel end-recipients) cannot reclaim VAT, so adding VAT on top of your prices just makes you more expensive unless the platform eats the cost.
• Platforms usually control the final prices, not you, so you cannot simply add 20% to what the passenger sees.
• Your actual input VAT (on fuel, servicing, etc.) often isn't large enough to offset the hassle and the output VAT you'd owe.

Specialist courier/taxi accountants nearly always say: do not volunteer for VAT as a gig driver or rider unless you have had one-to-one advice that clearly shows a gain.

5. Flat Rate Scheme, courier percentage and why it rarely helps gig workers

Under the Flat Rate Scheme (FRS):

• You still charge VAT at 20% (if you charge at all, which in app models is complicated).
• You pay HMRC a flat percentage of your VAT-inclusive turnover, instead of working out VAT on every sale and purchase.

For 2025-26:

• For "transport and storage, including couriers", the standard flat-rate is about 10% of VAT-inclusive turnover.
• In your first year as a new VAT-registered business, you can get a 1% discount, so effectively 9%.
• But if you are a "limited cost trader" (spending less than 2% of turnover or £1,000 a year on relevant goods), HMRC can force you onto 16.5% instead, which destroys any benefit.

For most gig drivers:

• Their spend on goods (not fuel) is low.
• They risk being treated as limited cost traders and paying 16.5% of gross, which is often worse than the normal VAT scheme.

So in real-world gig work, the Flat Rate Scheme is more of a specialist edge case than a magic saving.

6. What if you accidentally cross the VAT threshold using multiple platforms?

Say you are:

• Uber: £52,000
• Amazon Flex: £24,000
• Local courier work: £16,000
• Total taxable turnover over a rolling 12 months: £92,000.

At the end of the month where your 12-month total first passes £90,000, you have 30 days to register for VAT.

If you:

• ignore this and carry on taking gigs,
• keep "forgetting" to monitor your rolling 12-month numbers,

HMRC can:

• back-date your registration;
• demand VAT on your past taxable turnover from the date you should have registered;
• add penalties and interest.

And because passengers and platforms have already paid the fares with no extra VAT officially charged by you, that VAT bill often comes out of your pocket unless a platform contract explicitly shifts some of it.

Specialist taxi/courier accountants repeatedly warn drivers who are genuinely close to £90,000 to track their turnover monthly and get tailored advice before it is too late.

Worked example

Example 1: Typical full-time Uber + Deliveroo driver (well under the line)

• Uber: £42,000 turnover in 2025-26.
• Deliveroo: £8,000 turnover in 2025-26.
• Total taxable turnover: £50,000 (well below £90,000).

No VAT registration required. VAT that passengers pay on Uber fares is Uber's responsibility, not yours. You ignore VAT in your Self Assessment, you just report your self-employed income and expenses.

Example 2: Big multi-platform driver skirting the line

• Uber: £55,000
• Amazon Flex: £20,000
• Contract courier work done as a sole trader: £18,000
• Taxable turnover over the 12 months to 31 August 2025: £93,000.

You cross £90,000 in August 2025. You must register by 30 September 2025 and start accounting for VAT from 1 October 2025, broadly speaking.

If you do nothing, HMRC can register you anyway and demand VAT on around £3,000 of turnover for that 12-month window, plus whatever you do after October, plus penalties.

Because your "customers" are largely platforms and end-customers who have already paid fixed fares, you are unlikely to be able to go back and add 20% to what they paid. That VAT bill comes straight from your pocket.

What Reddit, TikTok and forums get wrong

1. "Uber's VAT means you don't need to think about VAT at all, Uber deals with everything." Wrong. Uber's VAT status only covers its own supplies; you still need to track your own turnover against the £90,000 threshold across all platforms.

2. "Your VAT threshold is based on the full passenger fare before Uber's cut." Generally wrong in the current Uber model. HMRC looks at what you supply; if Uber is the one charging the passenger and then paying you a net amount, your turnover is usually the net payout figures, not the gross fares.

3. "Voluntary VAT registration lets you claim all the VAT back on fuel, so drivers should register early to save tax." Misleading. Unless your customers are VAT-registered businesses (they are not: they are passengers and consumers), you will probably pay out more VAT than you recover; platforms rarely adjust the prices in your favour.

4. "Flat Rate Scheme at 10% is a hack, you keep the difference and make free money." Often wrong once you apply the limited cost trader rule at 16.5%, and once you realise you're working with VAT-inclusive turnover. It can make drivers worse off and you lose most input VAT recovery.

5. "If you go over £90k once, just drop your hours, HMRC won't bother you." Dangerous. The threshold is a rolling 12-month test; once you pass it, you have an obligation to register, and HMRC has explicit powers to back-register and penalise late registration.

Action steps for the reader

1. Add up your total self-employed turnover from all platforms (Uber, Deliveroo, Amazon Flex, Just Eat, Stuart, Gophr, contract courier work) for the last 12 months, not just the tax year.
2. If that rolling 12-month total is anywhere near £70,000 to £80,000, start tracking it monthly and speak to a tax adviser or union-linked accountant about VAT risk.
3. Treat the figures you put as turnover on SA103 (your net income from platforms, not passenger gross fares) as your default for VAT-threshold monitoring unless you have a contract that clearly says otherwise.
4. Ignore TikTok "hacks" that tell you to register for VAT early "to claim fuel back". Get real numbers for your own fuel VAT vs the VAT you would owe.
5. If you ever genuinely cross £90,000 in a 12-month period, contact HMRC or an accountant quickly to get registered and minimise penalties rather than hoping HMRC never notices.

Related tools GigKiln should build

• VAT-threshold tracker: lets gig workers enter monthly turnover from each platform and shows how close they are to the £90,000 rolling limit.
• VAT impact simulator: estimates how voluntary VAT registration or Flat Rate Scheme would change take-home pay for a driver with given earnings and costs.
• Uber VAT explainer: visual guide showing where VAT sits in the Uber fare and what part is (and is not) the driver's turnover.

Related guides

• "Self Assessment and VAT: what Uber and Deliveroo workers actually need to track"
• "Making Tax Digital, Self Assessment and VAT: how they fit together for gig workers"
• "Expenses, VAT and pricing for private-hire drivers and couriers"
• "What happens if you accidentally cross the VAT threshold as a gig worker?"

Sources

Primary

• GOV.UK, When to register for VAT, accessed 18 April 2026.
• GOV.UK, Increasing the VAT registration threshold (policy note, VATA 1994 update to £90,000 / £88,000), accessed 18 April 2026.
• GOV.UK, How VAT applies to taxis and private hire cars (VAT Notice 700/25), accessed 18 April 2026.

Secondary

• Money.co.uk, What is the VAT registration threshold?, accessed 18 April 2026.
• Yousign, VAT Registration UK: £90k Threshold Guide, accessed 18 April 2026.
• ANNA Money, VAT Registration Threshold Monitor, accessed 18 April 2026.
• Streets / Anthony James Brice, Taxis: what is liable to VAT, accessed 18 April 2026.
• Pegasus Couriers, Should a Self-Employed Courier Register for VAT UK, accessed 18 April 2026.
• Trueman Brown, Flat Rate Scheme 2025/26: Simple VAT Guide, accessed 18 April 2026.
• Microentity Accounts and VAT explainer blogs on FRS and limited-cost trader rules, accessed 18 April 2026.