T
he taxman is chasing rideshare service Uber for an additional £386 million value of VAT , after it paid a £615 million settlement final 12 months.
As first reported by lawyer Dan Neidle of Tax Policy Associates, Uber revealed in its half-year results final night time that HMRC “disputed the amount and manner in which we were applying VAT to our UK business ”.
The San Francisco-based company had beforehand argued it was exempt from VAT as a result of its drivers had been classed as self-employed. However, after a Supreme Court judgement required its drivers to be thought-about employees , it confronted questions of whether or not VAT now utilized.
In November of 2022 it handed £615 million to HMRC to resolve the claims.
The further £386 million demanded by HMRC is as a result of it challenged Uber’s software of a algorithm designed to simplify the tax for tour operators and comparable companies, which can be utilized by its rideshare rivals and minicab companies.
Under these guidelines, which apply to corporations that transport passengers with out meaningfully “altering” the service, VAT would solely apply on Uber’s profit for every journey.
A spokesperson mentioned: “Uber is seeking clarity for the whole industry in order to protect drivers and passengers.”
Uber argues that, with out these guidelines, prospects would find yourself paying extra for journeys as they’d be those paying VAT.
Uber will dispute the cost in court docket, however due to the foundations round tax appeals, it was required to pay the entire first, and can solely get the £386 million again if it wins.
There is not any date set but for the court docket case, however it’s hoped that the problem may very well be settled quickly as different companies may additionally dispute the evaluation.
Last week, Uber gained a High Court case over how VAT was utilized by non-public taxi companies positioned outdoors of London,
