[notahacker]

> Doesn't this come down to what entity actually issued the invoice?

The way a value added tax works is the company that issues the invoice owes tax on its own markup.

In normal circumstances, this means the company that issues the invoice charges 20% on the full amount of the product, and their suppliers charge 20% on their invoices, with the first company paying the VAT on those invoices to their suppliers and the difference to the HMRC (who also collect VAT from the suppliers)

Uber's argument was "hey, we only owe HMRC for our markup, but these drivers supplying taxi services [probably] don't earn enough to owe VAT either, so we won't add VAT to our payments to them and can lower the overall bill to our end customers.