Taxi Driver Online

Very important topic, and other threads getting a bit messy, so maybe worth a new one for this article.

This says the hearing took place yesterday, and decision due today. Sounds a bit prompt for this kind of thing, but I'm certainly no expert in this kind of court procedural stuff.


Taxi fares outside London could rise by a fifth if Uber wins court case

https://www.theguardian.com/technology/ ... on-pay-vat

Ride-sharing company is attempting to force taxi firms to pay VAT on journeys

Taxi firms outside London could be forced to hike their prices by a fifth if Uber wins a high court battle this week that would mean they pay VAT on journeys.

A ruling is expected to be handed down on Friday after the ride-sharing app sued Sefton council in Merseyside over VAT terms for operators outside London.

It comes after Uber revealed this week that it would hand £615m to UK tax authorities to settle an unpaid VAT claim following an investigation by HM Revenue and Customs.

Currently, private hire operators do not pay VAT as the individual drivers are usually classed as independent, self-employed contractors and do not meet the required earnings threshold. However, recent court rulings have prompted questions over that arrangement.

Uber was forced to raise its prices in March after the 20% tax was applied to rides booked through the app. The switch came about in response to a high court ruling last December that confirmed its drivers were classed as “workers” controlled by Uber rather than independent contractors and therefore the app was directly taking the bookings.

That made Uber the principal for tax purposes, with revenues high enough to warrant paying VAT. Other operators in the capital were also legally required to follow suit and contract directly with passengers to provide the journey and pay the tax.

The original ruling applied to Uber’s London business, but a spokesperson for the company told the Guardian it had applied the changes across the UK and it “considers that the PHV [private hire vehicle] regulation in the rest of England, Wales and Northern Ireland is substantially the same as London”.

The company is asking the high court to declare any licensed operator accepting a booking anywhere in the UK to also be classed as the principal contractor and therefore liable for VAT – potentially leading to a price rise in minicab fares across the country.

The hearing began on Thursday morning and a decision is expected on Friday.

Layla Barke-Jones, a partner in the dispute resolution team at the law firm Aaron & Partners, is acting on behalf of a group of Merseyside taxi firms, including the Sefton-based Delta Taxis, to counter Uber’s court move.

She said: “This case is a very important one that could have repercussions for the entire private hire industry in England and Wales, and in particular on passengers during this cost of living crisis.

“Due to the wider significance of the case, we have successfully applied on behalf of our clients to be interveners and look forward to representing their collective views in the high court.

“It is our intention to argue against the declaration sought by Uber from being made and we hope to protect the traditional models of the private hire industry that have existed before and after the 1976 [Local Government (Miscellaneous Provisions)] Act came into force and differ significantly from what app-based services, like Uber, offer.

“On behalf of our clients, we are seeking to prevent the unnecessary changes that will ultimately impact everyday people if the declaration were made.”

Wasn't that the Supreme Court ruling?

Correct me if I'm wrong, and I didn't read the whole Supreme Court judgement

But, as I recall it, didn't the Supreme Court judgement query whether Uber's booking process was consistent with the London PH operator licensing regime (but that point wasn't necessary to decide the employment status issue)?

That then led to the high court declaration about the VAT position, and that therefore in terms of the London operator regime and the VAT legislation, in contractual terms Uber is the principal and thus liable to pay VAT on the whole fare?

Thus Uber started treating all fares across the UK as subject to VAT, so is now seeking a court declaration that the 1976 Misc Prov regime also makes operators in England outside London the contractual principals and thus all fares would be subject to VAT.


Would be interesting to hear how Delta et al and 'traditional models of the private hire industry' 'differ significantly' from what app-based services like Uber offer

especially as they all now run apps so have changed their business models slightly nearer to uber

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

Uber asked the High Court to clarify the Supreme Court decision, in respect of how their decision affected the issue of VAT.

As if the lower court is going to go against the Supreme Court FFS.

I think we need to, or more importantly the court needs to, is differentiate between Uber’s business model, which isn’t much different to the rest of us (I.e someone books a car, car turns up and take customer to destination for payment) and Uber’s payment method which it controls 100%.

Most firms in the UK do not control the payment process 100%. They may have account work that they control, but they have little or no control over the way that cash or in car card payments are processed.

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IDFIMH

No mention on the internet so I am assuming that the hearing will take more than a day

I thought it sounded odd that they were expecting judgement the day after it started

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

You could be right, and obviously it's not up to me, but I've never really given much weight to payment systems in terms of the employment status of drivers, and taxation stuff etc.

Yes, Uber is automated payments only, and they hold all the purse strings. But in that regard I view Uber as little more than Zettle and PayPal et al as regards processing payments made to drivers, so to that extent separate from the booking and despatch process etc.

Ditto cash - a bus driver is handling cash payments from customers, but that doesn't detract one iota from the fact they're an employee. So to that degree I'm not sure cash payments detract from the operator being the contractual principal in terms of VAT.

However, you could be right, but to that extent if the court declares in Uber's favour then does that mean cash jobs on the average circuit will not include VAT, but account jobs going via the operator will? Just doesn't accord with common sense, somehow. On the other hand, the law doesn't necessarily concur with common sense

Yes, that's another interesting angle, and will the courts view app bookings as different to phone bookings? Can't see why they should. But of course the app process is one reason why those outside the trade think Uber is a different beast, rather than a simply a global minicab operation using the latest despatch technology.

But to the extent much of the old school trade now uses apps, then that it should demonstrate to lawyers and experts that Uber isn't really that different. So if the courts finds in Uber's favour, then this will underline that Uber really didn't reinvent the wheel after all