Budget 2016: Uber drivers can use the new digital tax break aimed at occasional Airbnb and eBay users - but here's why they won't

Lynsey Barber
Follow Lynsey
Uber drivers are better off using other allowances (Source: Getty)

A new scheme designed to offer occasional users of the sharing economy renting out a room on Airbnb tax breaks, could be used by Uber drivers.

The new tax breaks, on earnings of up to £2,000 and announced by George Osborne in today's Budget, has angered black cab drivers.

However, the Treasury told City A.M. that while Uber drivers would be able to use the tax break, they were unlikely to do so as they would be better off using the existing expenses allowance for the self-employed.

Read more: Airbnb tax breaks prove Britain's a world leader in the sharing economy

The two schemes can not be used together and the expense allowance would be greater than the new tax-free allowance.

The tax break is aimed at those who only occasionally rent out rooms or parking spaces, or sell items or services on sites such as eBay, Etsy or Task Rabbit.

Read more: Airbnb hosts and eBay sellers will get tax breaks

It benefits those who earn only a small amount as the allowance exempts anyone earning less than £1,000 from having to submit a tax return, which has to be done under current rules, even if they do not owe any tax on the earnings.

A basic rate tax payer could save up to £400 from the scheme which offers one £1,000 free tax allowance for occasional jobs and one for property.

Related articles