Treasury eyes VAT charges for gig economy firms

The review is part of the government’s aim of “ensuring fair competition and a level playing field for all businesses, whether operating in the sharing economy or as a traditional business, regardless of their size and location”.Based on the predicted size of the gig economy by 2025, it would equate to a loss of up to £28bn a year in VAT for the Treasury.The consultation document highlighted examples of the business practices it wanted to investigate for action where “no VAT [was] being charged where it might have been in the traditional economy”.These included car-booking rides where “the drivers at this firm are all self-employed”. The Treasury added that the review was designed to “test the government’s view of the VAT challenges the sharing economy creates”.

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