Discussion
On what ground does it think it isn't liable to charge UK VAT?
Is Uber claiming that its UK turnover is less than £83,000?
Is it actually VAT registered in the UK?
Is it reclaiming VAT on its costs in the UK?
Or is it pretending it's not actually in the UK at all and has no income derived from its UK activity?
Is Uber claiming that its UK turnover is less than £83,000?
Is it actually VAT registered in the UK?
Is it reclaiming VAT on its costs in the UK?
Or is it pretending it's not actually in the UK at all and has no income derived from its UK activity?
Centurion07 said:
fesuvious said:
The reasons/problems extend where firms like this send an email to HMRC that says the following (and it could be any number of dodging entities);
Dear HMRC / Gov
We just thought we'd drop you a note to say that we're not too keen on paying certain taxes you'd like us to.
We're following a logic that given we now provide employment to 3500 people you can either suck up our tax arrangements or have us cancel operations in the UK and you can pay the benefits to them. Plus of course we'll hire PR so that the major news networks spin it so its the Gov's fault 3500 people are now unemployed.
No need to respond, we couldn't give a f@&k either way.
Yours Laughingly
Big Ass firm based in the Cayman islands.
This^.Dear HMRC / Gov
We just thought we'd drop you a note to say that we're not too keen on paying certain taxes you'd like us to.
We're following a logic that given we now provide employment to 3500 people you can either suck up our tax arrangements or have us cancel operations in the UK and you can pay the benefits to them. Plus of course we'll hire PR so that the major news networks spin it so its the Gov's fault 3500 people are now unemployed.
No need to respond, we couldn't give a f@&k either way.
Yours Laughingly
Big Ass firm based in the Cayman islands.
IIRC this was the exact scenario that allowed Vodafone to pay a vastly reduced sum a few years back, by threatening to up sticks from the UK.
Regardless, none of the above actually happens in the real world does it.
It's an odd argument that Taxis should be exempt from VAT along the lines of public transport in general, it's not mass transport. You pay VAT when you get in the car and drive, why would it be any different because you're paying someone else to drive for you? Though I suppose there is a precedent in allowing taxis to use priority lanes.
Centurion07 said:
Have to say I'm with Uber on this one.
I don't see how, as their driver's are all self-employed and pay a "circuit fee" to Uber, that they can be classed as anything other than a collection agent.
The entire fare is paid to the driver and HE pays Uber a "circuit fee" out of that. As a consumer, you are not paying Uber for anything, you are simply paying them the fare which gets passed to the driver and then HE pays Uber for the service they provide to HIM.
Instead of bleating about companies "taking advantage" of loopholes, people should be complaining to the govt. to get them closed!
Employment Tribunal disagrees with you - Uber drivers are workersI don't see how, as their driver's are all self-employed and pay a "circuit fee" to Uber, that they can be classed as anything other than a collection agent.
The entire fare is paid to the driver and HE pays Uber a "circuit fee" out of that. As a consumer, you are not paying Uber for anything, you are simply paying them the fare which gets passed to the driver and then HE pays Uber for the service they provide to HIM.
Instead of bleating about companies "taking advantage" of loopholes, people should be complaining to the govt. to get them closed!
( https://www.judiciary.gov.uk/wp-content/uploads/20... )
Your description of the mechanics of how Uber works, in terms of payments made to where and by whom, is incorrect.
The link above contains a detailed description but, essentially, the rider pays Uber B.V. directly and elements of that money then make their way through other Uber entities on to other parties, including the driver.
My interest in this case is purely why getting the matter addressed requires a private case, rather than HMRC doing its job
Edited by anonymous-user on Saturday 11th March 14:47
Eric Mc said:
On what ground does it think it isn't liable to charge UK VAT?
Is Uber claiming that its UK turnover is less than £83,000?
Is it actually VAT registered in the UK?
Is it reclaiming VAT on its costs in the UK?
Or is it pretending it's not actually in the UK at all and has no income derived from its UK activity?
Uber's defence to the case (and indeed the detailed basis on which the case is being brought) isn't yet known.Is Uber claiming that its UK turnover is less than £83,000?
Is it actually VAT registered in the UK?
Is it reclaiming VAT on its costs in the UK?
Or is it pretending it's not actually in the UK at all and has no income derived from its UK activity?
Edited by anonymous-user on Saturday 11th March 14:44
JPJPJP said:
Employment Tribunal disagrees with you - Uber drivers are workers
( https://www.judiciary.gov.uk/wp-content/uploads/20... )
Your description of the mechanics of how Uber works, in terms of payments made to where and by whom, is incorrect.
I haven't got time to wade through that! I'm a busy taxi driver. ( https://www.judiciary.gov.uk/wp-content/uploads/20... )
Your description of the mechanics of how Uber works, in terms of payments made to where and by whom, is incorrect.
Synopsis?
I've never used Uber but was under the impression it works the same as when I have a customer that pays by card i.e. I use my firm's handset/software to take the payment which is passed onto me via the company. The customer hasn't paid my firm for a service but has paid ME to get them from A to B. How does Uber differ from this?
Centurion07 said:
I haven't got time to wade through that! I'm a busy taxi driver.
Synopsis?
I've never used Uber but was under the impression it works the same as when I have a customer that pays by card i.e. I use my firm's handset/software to take the payment which is passed onto me via the company. The customer hasn't paid my firm for a service but has paid ME to get them from A to B. How does Uber differ from this?
Synopsis: Uber is far more involved in the all aspects of the transaction than the situation that you describe at your company. It is hard to summarise a whole ET judgment in a single PH post, but this extract from it, section 92, goes some way to doing so.Synopsis?
I've never used Uber but was under the impression it works the same as when I have a customer that pays by card i.e. I use my firm's handset/software to take the payment which is passed onto me via the company. The customer hasn't paid my firm for a service but has paid ME to get them from A to B. How does Uber differ from this?
fesuvious said:
@hairyben
You've missed the point.
Big firms argue that they'd be making so many thousands unemployed.
+ the self employed ('gig') all pay tax.
+tax on the fuel, ins etc etc etc
And they they say - 'take it or leave it, put up with out tax arrangment or we'll operate elsewhere'
For those reading who have seen Eddie Murphy's 'RAW' from the mid eighties.....Well the face, sound and noise he pulls describing how the pussy whipped fella says 'ok'.....Thats how HMRC and GOV react.
Just like they did with voda.
What point am I missing?You've missed the point.
Big firms argue that they'd be making so many thousands unemployed.
+ the self employed ('gig') all pay tax.
+tax on the fuel, ins etc etc etc
And they they say - 'take it or leave it, put up with out tax arrangment or we'll operate elsewhere'
For those reading who have seen Eddie Murphy's 'RAW' from the mid eighties.....Well the face, sound and noise he pulls describing how the pussy whipped fella says 'ok'.....Thats how HMRC and GOV react.
Just like they did with voda.
I thought Vodafone's point was they could pull their global HQ & assoc jobs out of the UK... the jobs uber facilitates are those of the cab drivers who'd do the same work for someone else as the fares would still require a ride, be it through uber/addisonlee/localcabco etc, which is why I use the word facilitate rather than provide. If tesco shut down we wouldn't stop buying groceries we'd go to sainsburys who'd enjoy increased market share and employ more people to cope. In fact many would argue the UK might be better off without uber, as the race-to-the-bottom model has turned reasonably decent pay jobs in terms of hackneys into low value jobs to the UK anyway.
JPJPJP said:
Synopsis: Uber is far more involved in the all aspects of the transaction than the situation that you describe at your company. It is hard to summarise a whole ET judgment in a single PH post, but this extract from it, section 92, goes some way to doing so.
Ta.TBH, to me it still sounds like the conditions under which most cab firms operate.
Eric Mc said:
Centurion07 said:
Instead of bleating about companies "taking advantage" of loopholes, people should be complaining to the govt. to get them closed!
Isn't that what this thread is all about?Somebody is confronting Uber directly when in fact it's actually the govt. they should be tackling. I guess maybe it's a means to an end?
Similarities or differences between uber and mini cab firms are less important to the VAT position than the fact that the ET ruled as it did: that Uber drivers are workers.
Even if that judgment is overturned on appeal, the VAT question is still a valid one to ask on a number of other grounds
As Eric said a few posts ago, it will be interesting to see how it unfolds
Even if that judgment is overturned on appeal, the VAT question is still a valid one to ask on a number of other grounds
As Eric said a few posts ago, it will be interesting to see how it unfolds
JPJPJP said:
Similarities or differences between uber and mini cab firms are less important to the VAT position than the fact that the ET ruled as it did: that Uber drivers are workers.
Even if that judgment is overturned on appeal, the VAT question is still a valid one to ask on a number of other grounds
As Eric said a few posts ago, it will be interesting to see how it unfolds
NOW I get it! Even if that judgment is overturned on appeal, the VAT question is still a valid one to ask on a number of other grounds
As Eric said a few posts ago, it will be interesting to see how it unfolds
This is why I'm a lowly cab driver and not a QC!
JPJPJP said:
Uber's defence is possibly (but it remains to be seen) that it simply acts as a booking agent for the drivers and that as that service is carried out in NL, the service provided can be zero rated for UK VAT and that individual drivers are responsible for UK VAT registration where appropriate for the provision of the actual taxi service.
The booking service isn't actually zero rated in the UK, but the effect in this situation is much the same.A supply by a booking agent in the NL to a business in the UK (such as a self-employed mini-cab driver) would be reverse-chargeable by the business in the UK.
If the driver is registered for VAT they account for the reverse charge (i.e. pay over the VAT the booking agent should have accounted for, and then claim it back). If they are not registered the amounts which are reverse chargeable count towards the registration threshold.
As individual drivers are never likely to be VAT registered even taking into account the reverse charge, the 'trick' is exploiting the cross border set up to wash out the VAT on the booking fee which would be accounted for if the booking agent was in the UK.
JPJPJP said:
AIUI The premise of this case is that the fare should be subject to VAT
It isn't, I don't think about the relationship between driver and uber, but about the nature of the contract that the rider enters into being with an entity that should charge VAT to the rider
Yes and no.It isn't, I don't think about the relationship between driver and uber, but about the nature of the contract that the rider enters into being with an entity that should charge VAT to the rider
VAT is payable by the SELLER of services to HMR&C, if they exceed the turnover threshold. So the key, as you say, is who is the end-customer's contract with. But this is directly impacted by the nature of the Uber / driver relationship, as that determines whether Uber is only an agent, or is a de-facto employer of the drivers.
So:-
- If Uber is a mere agent and the taxi drivers are the SELLER, then your average sole-trader cabbie isn't registered and doesn't need to register for VAT. So no VAT chargeable to the punter or payable to HMR&C by the cabbie.
- If Uber is the employer and the cabbies are the employees, then Uber is compelled to charge VAT because its turnover is >£83k.
As pointed out above, Uber can't just throw their toys out of the pram and storm off to a tax haven as the market is here and the supply is here. So this should be a nice easy open goal for HMR&C now...I'm as confused as everyone else why they're not pushing it...
PurpleMoonlight said:
Does UBER charge VAT on the commission it charges the drivers?
This and...PurpleMoonlight said:
What's The Good Law Project's vested interest in this then?
This.The two key questions IMO and no one seems to be able to answer them.
If Uber's model is as described, then the answer to the first should be yes...unless of course the firm is set up in Luxembourg or Dublin or somewhere else where taxes such as UK VAT can be avoided (which is an entirely different issue).
The second one is altogether more interesting.
- Can anyone take a legal case against any company on its tax or other affairs?
- What if the Good Law Project win. Then what? What do they receive from it? What then happens?
Something doesn't feel right about that. Tax affairs should be between an organisation (and their delegates) and the HMRC. Everyone else should butt out. Not doing sounds like a recipe for disaster.
Maybe a case needs to be brought against the Good Law Project on whether it's interference is legal or not
havoc said:
Yes and no.
VAT is payable by the SELLER of services to HMR&C, if they exceed the turnover threshold. So the key, as you say, is who is the end-customer's contract with. But this is directly impacted by the nature of the Uber / driver relationship, as that determines whether Uber is only an agent, or is a de-facto employer of the drivers.
So:-
- If Uber is a mere agent and the taxi drivers are the SELLER, then your average sole-trader cabbie isn't registered and doesn't need to register for VAT. So no VAT chargeable to the punter or payable to HMR&C by the cabbie.
- If Uber is the employer and the cabbies are the employees, then Uber is compelled to charge VAT because its turnover is >£83k.
As pointed out above, Uber can't just throw their toys out of the pram and storm off to a tax haven as the market is here and the supply is here. So this should be a nice easy open goal for HMR&C now...I'm as confused as everyone else why they're not pushing it...
The employment tribunal ruled that uber drivers are workers and that the rider's contract is made with uber London ltd (in the case of the tribunal, it might be different outside London). Uber has reported U.K. Attributable Revenues of £115mVAT is payable by the SELLER of services to HMR&C, if they exceed the turnover threshold. So the key, as you say, is who is the end-customer's contract with. But this is directly impacted by the nature of the Uber / driver relationship, as that determines whether Uber is only an agent, or is a de-facto employer of the drivers.
So:-
- If Uber is a mere agent and the taxi drivers are the SELLER, then your average sole-trader cabbie isn't registered and doesn't need to register for VAT. So no VAT chargeable to the punter or payable to HMR&C by the cabbie.
- If Uber is the employer and the cabbies are the employees, then Uber is compelled to charge VAT because its turnover is >£83k.
As pointed out above, Uber can't just throw their toys out of the pram and storm off to a tax haven as the market is here and the supply is here. So this should be a nice easy open goal for HMR&C now...I'm as confused as everyone else why they're not pushing it...
Case should be launched soon enough and there will be something more to discuss then
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