Uber and VAT

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Discussion

anonymous-user

Original Poster:

53 months

Friday 30th June 2017
quotequote all
A little twist in the winding road that is the Uber VAT journey

https://waitingfortax.com/2017/06/30/uber-a-new-fr...

Which is linked to this letter

https://jolyonmaugham.files.wordpress.com/2017/06/...



Murph7355

37,651 posts

255 months

Friday 30th June 2017
quotequote all
JPJPJP said:
A little twist in the winding road that is the Uber VAT journey

https://waitingfortax.com/2017/06/30/uber-a-new-fr...

Which is linked to this letter

https://jolyonmaugham.files.wordpress.com/2017/06/...


If the loser did have to pay the winner's costs, would Maugham be opening up this new front?

Bearing in mind that the winner in that situation would be the taxpayer...

Neither his letter nor his blog are making me warm to him. My 5yr old does a better job of disguising being a tell tale.

anonymous-user

Original Poster:

53 months

Friday 30th June 2017
quotequote all
I suspect some people that donated to the crowdfunding might be asking why he didn't do this first.

maffski

1,866 posts

158 months

Monday 3rd July 2017
quotequote all
An update from the 'Good Law Project' on the case

Good Law Project said:
...we have to address the possibility of a costs liability which might top £1m even before any appeals. We hope that the judge will see the public interest in our claim but if she or he does not we may look for an alternative claimant who doesn’t have any material assets...
So, salt of the earth Jo either wants the taxpayer to cover the costs of a lost case, or would like to dupe some poor sop into bankruptcy.

anonymous-user

Original Poster:

53 months

Tuesday 19th September 2017
quotequote all
Not to do with VAT, but something that could be seen to further undermine Uber's claim to be acting only as Agent in the business model

https://arstechnica.com/tech-policy/2017/09/uber-d...

"Uber is fighting a proposed class-action lawsuit that says it secretly over charges riders and under pays drivers. In its defense, the ride-hailing service claims that nobody is being defrauded in its "upfront" rider fare pricing model.
...
The suit claims that, when a rider uses Uber's app to hail a ride, the fare the app immediately shows the passenger is based on a slower and longer route compared to the one displayed to the driver. The rider pays the higher fee, and the driver's commission is paid from the cheaper, faster route, according to the lawsuit."

For those minded to see the source document, I think this is it

https://arstechnica.com/wp-content/uploads/2017/04...

skwdenyer

16,181 posts

239 months

Sunday 24th September 2017
quotequote all
JPJPJP said:
Not to do with VAT, but something that could be seen to further undermine Uber's claim to be acting only as Agent in the business model

https://arstechnica.com/tech-policy/2017/09/uber-d...

"Uber is fighting a proposed class-action lawsuit that says it secretly over charges riders and under pays drivers. In its defense, the ride-hailing service claims that nobody is being defrauded in its "upfront" rider fare pricing model.
...
The suit claims that, when a rider uses Uber's app to hail a ride, the fare the app immediately shows the passenger is based on a slower and longer route compared to the one displayed to the driver. The rider pays the higher fee, and the driver's commission is paid from the cheaper, faster route, according to the lawsuit."

For those minded to see the source document, I think this is it

https://arstechnica.com/wp-content/uploads/2017/04...
Interesting. When there are "surges" are those passed on in full to the driver?

anonymous-user

Original Poster:

53 months

Tuesday 26th September 2017
quotequote all
An update on the good law project case

A little progress on Maugham's correspondence with HMRC about claiming the VAT back on an uber fare absent a VAT receipt

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

Extract

In August, HMRC replied to Mr Maugham’s VAT Return asking for more information and he wrote back in the following terms:

"I write further to my letter of 30 June 2017 and your reply of 7 August 2017.

"In your reply you say you are presently unable to exercise your discretion under regulation 29(2) Value Added Tax Regulations 1995 but invite me to submit further evidence.

"I attach for your information a letter before action to Uber London Limited (“Uber”) dated 21 March 2017 together with Uber’s reply dated 3 April 2017.

"You will note from the correspondence that:

there is, and can be, no dispute about the fact of a supply of taxi services to me or the price I paid;
there is, and can be, no dispute that if the supply were made by Uber (a taxable person) the price paid includes an amount of input tax (corresponding to the amount of output tax for which Uber would on that basis be obliged to account for to HMRC); and
the reason why there is no VAT invoice recording VAT in the amount of £1.06 is simply that Uber denies that it has made a VATable supply: it says that it was its driver that made that supply.
"Given those facts (which are established by the evidence supplied with this letter and my letter of 30 June 2017) I can with respect see no basis for you to decline to exercise your discretion:

if you agree with Uber that the supply is made by the driver then the appropriate course is for you to raise an assessment against me under section 73(1) Value Added Tax Act 1994; and
if you agree with me that the supply is made by Uber then you ought to exercise your discretion to allow my claim for input tax.
"What would not be lawful would be for HMRC to leave this matter, and my tax liabilities, in limbo by declining to take, or unduly delaying, one or other of the above decisions.

"I await your further response."

We now wait to hear further from HMRC. When there is more news we will update you.


skwdenyer

16,181 posts

239 months

Tuesday 26th September 2017
quotequote all
Interesting again. Not sure what the next move is if HMRC don't respond - launch a judicial review against their failure to make a determination?

anonymous-user

Original Poster:

53 months

Thursday 5th October 2017
quotequote all
Uber London ltd filed accounts for year to 31 Dec 16 (very last minute / technically late filing but no matter) show that it was owed £2.49m in recoverable VAT at the year end

If that represents a full quarter, it gives a run rate of £10m a year

Of no real consequence, just a point of note

Alpinestars

13,954 posts

243 months

Thursday 5th October 2017
quotequote all
JPJPJP said:
Uber London ltd filed accounts for year to 31 Dec 16 (very last minute / technically late filing but no matter) show that it was owed £2.49m in recoverable VAT at the year end

If that represents a full quarter, it gives a run rate of £10m a year

Of no real consequence, just a point of note
If it's owed, it'd more likely be on monthly returns.

anonymous-user

Original Poster:

53 months

Thursday 19th October 2017
quotequote all
Now Maugham seeks to shine his light towards uber pool

https://waitingfortax.com/2017/10/18/uber-a-third-...


Followers of the Uber saga will remember this post, in which I explained why I was suing Uber for a VAT invoice, a case that could well end up costing Uber over £1 billion in VAT and interest.

Especially attentive followers of the Uber saga will also remember this post in which I said I was writing to HMRC to claim the input tax that, I think, should have been on the VAT invoice.

There are, as someone who takes Ubers a lot might say, many roads home.

Anyway.

Last week I was speaking about Uber at a conference about tax and employment matters. And, as my fellow panellists spoke, my mind drifted (listening is not a core skill of the Bar) and I began to wonder about UberPool.

If you’re a passenger of Uber’s, UberPool is like a cross between a taxi service and a bus. You get one of their taxis – but you share it with other people going in vaguely the same direction.

The UberPool model is especially interesting to accountants and investors. Here’s Bloomberg:

Capture

So. When you take a regular Uber taxi, Uber only includes as its revenue what it says is a brokerage fee – i.e. the bit that it doesn’t pay to its workers (i.e. the drivers). But when you take an UberPool, Uber includes the whole fare as its revenue. Why might that be?

The answer seems to lie in the difference between the fare structures Uber operates for those different models. (I should note that Uber operates different UberPool models in different jurisdictions).

When you take a normal Uber taxi you pay Uber a sum calculated by its time and distance algorithm, say, 100 and it passes on to its worker 75. But when you take an UberPool, you pay Uber 70 (a fare based on historical data as to what that trip will cost) and perhaps a couple of other passengers pay Uber 70. And what Uber pays its worker doesn’t just depend on what you and the other passengers pay it. It also depends on how many passengers share that UberPool taxi. The more passengers share the UberPool the lower the percentage that Uber pays to its driver.

When it operates UberPool, Uber’s fare structure makes it look even less like a broker supplying business-to-business services to drivers and even more like a principal supplying business-to-consumer services to customers. And that’s why accounting practice, which looks to economic substance over legal form, says that when Uber operates UberPool it is really acting as a principal.

That same idea – that Uber really contracts as a principal and not a broker – lies at the heart of the Employment Tribunal case that found drivers were workers supplying their services to Uber and Uber, in turn, was supplying taxi services to passengers. And if that’s right (indeed quite possibly even if its wrong) Uber should be charging VAT and handing that VAT over to HMRC.

But the Employment Tribunal reached its decision focusing on normal Uber taxis. If accounting practice is to be believed, it would have been even easier for the Employment Tribunal to reach that conclusion focusing on UberPool.

Similarly, my VAT case against Uber focuses on a journey I took in a normal Uber taxi. My case would be even easier if I took it in an UberPool.

Anyway. Back to the conference.

‘Why not?’ I thought. And after the conference I booked an Uber, my first since the journey the subject of my High Court claim, and pressed the UberPool button.

I now have an invoice for that UberPool journey. I believe (from the heretical position of “tax expert”) that it should be a VAT invoice. And I will seek to add it to the High Court claim against Uber. And I will seek to claim it back from HMRC in my next VAT Return.

CoolHands

18,496 posts

194 months

Thursday 19th October 2017
quotequote all
So vat will be added on, costing all normal punters 20% more, but allowing knobhead barristers to claim vat back? Sounds great.

Ean218

1,959 posts

249 months

Thursday 19th October 2017
quotequote all
CoolHands said:
So vat will be added on, costing all normal punters 20% more, but allowing knobhead barristers to claim vat back? Sounds great.
It's not as though the VAT then goes into general taxation and provides things like the NHS which we all want though, is it? Uber are the villains here, not the UK government or overpaid barristers.

anonymous-user

Original Poster:

53 months

Thursday 19th October 2017
quotequote all
CoolHands said:
So vat will be added on, costing all normal punters 20% more, but allowing knobhead barristers to claim vat back? Sounds great.
If it is found that Uber has not been charging VAT when it should have been, then it (Uber) will be liable to account for and pay over the VAT it should have collected (+ potential penalites + interest) on previous fares.

From then on, Uber would have the choice to reduce net fares so that consumers pay the same including VAT as they do now with no VAT included or, as you suggest, to add VAT to fares.

If it is found that Uber has not been liable to charge VAT, then nothing need change and Barristers (be they labelled by some as knobheads or not) will not be able to claim back VAT from their Uber receipts.

anonymous-user

Original Poster:

53 months

Saturday 28th October 2017
quotequote all
Now, Maugham is asking why HMRC hasn't raised a prospective assessment to cover the potential liability that Uber might be shown to owe

https://waitingfortax.com/2017/10/27/something-is-...


Alpinestars

13,954 posts

243 months

Saturday 28th October 2017
quotequote all
JPJPJP said:
Now, Maugham is asking why HMRC hasn't raised a prospective assessment to cover the potential liability that Uber might be shown to owe

https://waitingfortax.com/2017/10/27/something-is-...
They have 4 years from the end of a chargeable period to raise and assessment, and more if the taxpayer has been careless. How long has uber been operating in the UK?

anonymous-user

Original Poster:

53 months

Saturday 28th October 2017
quotequote all
Alpinestars said:
They have 4 years from the end of a chargeable period to raise and assessment, and more if the taxpayer has been careless. How long has uber been operating in the UK?
Uber London Ltd was incorporated on 2 April 2012, but first fare was in June 2012,

Alpinestars

13,954 posts

243 months

Saturday 28th October 2017
quotequote all
JPJPJP said:
Alpinestars said:
They have 4 years from the end of a chargeable period to raise and assessment, and more if the taxpayer has been careless. How long has uber been operating in the UK?
Uber London Ltd was incorporated on 2 April 2012, but first fare was in June 2012,
Depending on when uber made its statement, HMRC may still be within the assessment period for the whole of the trading life of the UK operations. The blog is there no doubt to remind HMRC that he's watching.

anonymous-user

Original Poster:

53 months

Saturday 28th October 2017
quotequote all
Yes.

It does seem odd that Uber is, seemingly, not even being looked at by HMRC (according to an interpretation of its witness statements) when considerable efforts are made (rightly of course) to pursue and prosecute smaller schemes

e.g. http://www.mynewsdesk.com/uk/hm-revenue-customs-hm... in which a £57,563.35 VAT fraud resulted in 2 years and 3 months in prison