Taxi Driver Online

More tax problems loom on the horizon for Uber as GoodLawProject takes up the fight


Until now, it’s Uber’s corporation tax dodging that has come under public scrutiny. Its VAT liability -not so much. But all that’s about to change.

Uber’s VAT problem arises out of a basic tension in its business model. The Uber brand is all about selling to passengers. The very front page of its website invites passengers to “Ride with Uber.” But its contracts pretend – as the Employment Tribunal found last year – that it is selling not to passengers but instead to drivers. And facing in two directions at once is always going to cause you problems.

And the VAT problem it causes is this: Uber’s contracts says its drivers are supplying passengers with transport services. And the Employment Tribunal agreed that passengers were being supplied with transport services. But it said that the passengers were being supplied with those services not by the drivers but by Uber.

And all of this matters because the drivers are below the VAT threshold. They earn, by and large, less than £83,000 a year and so, if they are supplying transport services to passengers, they don’t have to charge VAT.

But if Uber is supplying transport services to passengers for VAT purposes, well, we know it earns more than £83,000 a year. And so it has to charge VAT. And then something has to give.

The drivers get paid less or fares go up or Uber’s commission falls.

And there’s also a pretty big hit to Uber’s balance sheet. It will owe HMRC very substantial back tax: all the VAT it hasn’t paid over the last four years. And it will very likely owe back taxes not just in the UK but all across Europe.

Now, it’s really HMRC that should be having this fight with Uber. But it’s got a feeble record of taking on the big US tech companies.

And at the Good Law Project – which is bringing this fight – we’re not confident that it’s up for this fight. And so we’re going to take Uber on.

Our director is a Queen’s Counsel, specialising in tax. And we’ve taken formal advice from another Queen’s Counsel, also specialising in tax. And they both reckon Uber should be charging VAT.

So next week we’re going to launch our challenge. Check it out over at http://www.GoodLawProject.org. The Queen’s Counsel and solicitors who will act in the challenge will do so at very discounted rates.

But Uber is a mighty beast – you don’t need us to tell you that. And so, if we’re going to have this fight, we’ll need all the financial help you can give us.

So please, come on over, sign up for email updates, have a look and if you can – when we launch the case – make a contribution to the costs.

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Think of how stupid the average person is, and realize half of them are stupider than that.
George Carlin

Uber must pay all of its taxes

Uber, like everyone else, must pay the right amount of tax.

Last year the Employment Tribunal held that Uber was supplying transportation services. If Uber is supplying transportation services, it should be charging 20% VAT on all its fares and paying that money over to HMRC: tens or hundreds of millions of pounds every year. But it wasn't last year and it isn't now. And if Uber is liable to VAT it will also owe substantial amounts of unpaid VAT from the past - both to HMRC and to other tax authorities throughout the EU. 

There is a public interest in ensuring that, in particular, big and powerful taxpayers pay the tax they owe. If we don't believe others are made to pay their taxes it undermines our willingness to pay ours. Why would we if we think they don't? 

There is also a perception that HMRC has one rule for big corporations and another rule for everyone else. 

We don't know much about the private conversations that take place between HMRC and the most powerful taxpayers. Neither side wants us to.

But from what we can see it looks as though the amounts of tax that Google and Apple pay in the UK are unaccountably lower than what they pay in smaller markets on the Continent. We know that the French Finance Minister accused HMRC of doing a sweetheart deal with Google. We know HMRC brings thousands of prosecutions of the poor who over-claim benefits but has, historically, been enormously reluctant to prosecute the wealthy who evade tax offshore. We know HMRC ran semi-permanent tax amnesties on evaded foreign taxes that appalled a senior UK judge. We know HMRC went out of its way to provide political cover for the artificial tax planning arrangements adopted by the likes of Facebook and Amazon – even going so far as to excuse them as “not tax avoidance.”

These are reasonable grounds for public interest. But there’s no way of understanding what's going on. Call up HMRC and you’re told customer confidentiality means they can’t discuss the matter. The Public Accounts Committee has no greater luck. Politicians and senior HMRC executives do not seem to want meaningful change. And some taxpayers – or in many cases non-taxpayers – offer, instead of transparency, a cocktail of evasion and untruth.

All of this damages trust in Government and in the establishment. And, if you care about the future of our country, this should worry you hugely.
The Good Law Project has taken advice from a Queen's Counsel, George Peretz QC, and a junior, Brendan McGurk, both of whom practice in the field of VAT law. And it has instructed Edwin Coe LLP. We cannot disclose that advice but you can read why our Director, Jo Maugham QC, thinks Uber is liable to charge VAT here (https://waitingfortax.com/2016/12/20/th ... t-problem/).

Last week, our Director, Jo Maugham QC, took an Uber from his office to meet a client. The law gives him a right to a VAT receipt for that journey. But Uber can't give him a VAT receipt without accepting it is liable to charge VAT. And it says it isn't. And so Jo intends to sue Uber in the High Court to force it to give him his receipt. If he wins it is very difficult to see how Uber can avoid charging VAT on all Uber rides in the UK and, quite possibly, elsewhere throughout the EU.

It is impossible to know what the litigation will cost. It will depend upon what Uber says and what the High Court says. But our initial target of £75,000 will cover the bulk of our costs of bringing the case in the High Court. Our lawyers are all acting at considerably below market rate. But we are likely to need to raise a further sum both for additional legal expenses and to ensure that, because Jo Maugham has no private interest in the litigation, he is not personally exposed to the costs of losing.

https://www.crowdjustice.org/case/uber/

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Think of how stupid the average person is, and realize half of them are stupider than that.
George Carlin

didn't this flag up 2 months ago ?

it certainly might explain why Mr K is so bad tempered these days and his staff are leaving could be very interesting if Uber have to pay VAT in every country they operate in across europe

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

Love to know the real reasons the vice boss left the other day.

Maybe he has seen the money dwindling, and wanted to get out before the Feds go in.

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IDFIMH

Canada seeks to end Uber's tax advantage over taxi companies

The new national budget unveiled Wednesday by Canadian Prime Minister Justin Trudeau's Liberal government took aim at ride-sharing providers such as Uber Technologies Inc [UBER.UL], looking to end a tax advantage they have over traditional taxi companies.

The budget statement said Trudeau's government plans to amend Canada's Excise Tax Act to redefine ride-sharing firms as taxi companies. That would force them to collect the goods and services tax (GST) on every ride provided, just as taxi operators are required to do.

Under current law, some drivers for ride-share operators make use of a so-called small-supplier provision that exempts the first C$30,000 of sales from the tax. The amendment would end the exemption.

"It's important to have a tax system that's fair and less complex," Finance Minister Bill Morneau said when asked about the matter during a news conference on the budget. "With respect to Uber, what we've done is say there's a level playing field. If you're in an Uber or if you're in a taxi, you pay GST (goods and services tax). That's consistent with what Canadians expect, and we think it's the right approach."

Uber spokesman Matt Kallman said: "We are reviewing the budget and its implications and will have more to say in the coming days."

The budget statement estimates the change will raise C$3 million in new revenue in the 2017 budget year, rising to C$5 million in the next few years.

The change could mean higher fares for Uber customers in Canada, and would be the latest headache for the $70 billion company. It has been battered with a series of controversies over the last several weeks ranging from the sudden departure of its president to a lawsuit from Alphabet Inc's (GOOGL.O) accusing it of stealing designs for autonomous car technology.

(Reporting by Dan Burns; Additional reporting by Heather Somerville in San Francisco; Editing by Lisa Shumaker)

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lack of modern legislation is the iceberg sinking the titanic of the transport sector