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Uber Drivers or Uber – Who will pay the VAT ?

Uber taken to Court in UK – Yet Again

Are you, the Uber driver, going to be responsible for VAT or is it Ubers problem.

Or maybe it’s no one.Uber VAT Picture 1

Even if the courts find it to be Ubers responsibility how will they cover the cost.

  • They could add VAT to all fares reducing their competitive edge  and hence the number of rides.
  • They could increase the percentage that drivers pay to Uber haven forbid.
  • Or they could reduce their profit and pay the VAT without either of the above, and pigs might fly.

The outcome of the high court action is only the first step and once started other steps must follow.

Now Jo Maugham, a Tax barrister, has brought a case against Uber claiming that they are liable for VAT.

 

What’s the Argument

Transport companies and you as an Uber driver must register for VAT if your earning exceed £ 85,000 per year.

By the way if you do earn more than this please drop me a line as I need to know how you’re doing it.

Uber however claim that they are not a transport company but a technology supplier and therefore are not liable.

From 2015 figures it would appear that Uber made £115 Million, in the UK, so that Vat at 20% would give them a bill for £23 Million. This does not include previous years.

Watch this Situation Carefully

Now Uber has two legal battles in the UK of which the first has already gone against them and is awaiting appeal.

If they were to lose both cases and any subsequent appeals they may consider treating the UK in the same way that they treated Denmark when facing a new law that toughened standards for cabs.

They walked away and closed down operations in that country.

Uber said that they would continue to ” work with the government in the hope that they will update their proposed regulations.”

We will just have to wait and watch.

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About Brian G

The UK Rideshare and Ride hail blog. How to Guides, Reviews, Weekly News, Opinion and personal view of the business. Brian who got his first Black Cab at the age of 26 had had a life long interest in all things related to cabs and private Car. In addition i have had 18 years experience of running my own business and helping others to get started.

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