MP criticises Uber for ‘opting out’ of UK tax regimeThe row over the future of the London taxi market reignited on Friday after an influential MP said new entrants such as Uber, the smartphone car service “unfairly undercut London operators by opting out of the UK tax regime”.
Margaret Hodge said she was “particularly concerned” about Uber’s tax structure and its impact on the public purse and the livelihoods of London cabbies and private hire drivers.
In a letter to Boris Johnson, the London Mayor, she urged him to ensure that Transport for London (TfL), which regulates the industry, “does not inadvertently allow tax avoidance in London”.
The focus on the tax structure of the Silicon Valley-based company is the latest stage of a row between Uber and thousands of taxi and minicab drivers that has led to protests in London, Paris, Madrid and Berlin.
Ms Hodge, who is a London MP and chair of the Public Accounts Committee, said Uber customers were required to use an app that is operated via a Dutch entity. Uber therefore paid corporation tax in the Netherlands but not in the UK, she said.
She accused TfL of failing to apply the appropriate regulations to Uber by not insisting they have a London-licensed base, which would oblige them to pay UK corporation tax.
“Surely TfL has a duty to enforce legislation that will ensure a fair and level playing field for all taxi and private hire operators?” she said.
In a statement, Uber said: “Uber complies with all applicable tax laws, and pays taxes in all jurisdictions, such as corporate income tax, payroll tax, sales and use tax, and VAT. Uber London Limited is a licensed PHV Operator and recently passed with flying colours the largest inspection of records ever conducted by TfL.”
The Licensed Private Hire Car Association (LPHCA) has said that routing passengers’ payments through Uber BV, a company based in the Netherlands was a breach of regulations, although it has acknowledged the British company that dispatches the cars, Uber London, is licensed.
The GMB union said it looked as though TfL was enabling tax avoidance by Uber.
Steve ******** of the union’s Professional Drivers Branch said: “This whole debate has until now been about an industry reluctant to adapt, but I would say that the real issue here is that the regulator is playing with two sets of rule books – one that allows Uber to skirt the rules and one that sets out miles of bureaucratic red tape for everyone else.”
The focus on Uber’s tax structure – which includes companies and partnerships in Bermuda, Ireland and the Netherlands – is the latest strand of a dispute that has also focused on claims by London cabbies that Uber operates a meter system, which only black cabs are allowed to use.
TfL has given approval to Uber because it says the smartphones its drivers use are not attached to the vehicles and so are not meters. It has, however, asked the High Court to give a binding ruling on whether Uber violates the 1998 law governing taxis.
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