Uber and VAT

[Alpinestars]

JPJPJP said:

The service provider is not & does not need to be VAT registered

Edited by JPJPJP on Tuesday 4th April 19:20

Not sure about that.


Save as otherwise provided in these Regulations, where a registered person—
(a)makes a taxable supply in the United Kingdom to a taxable person

[PF62]

Alpinestars said:

Not sure about that.


Save as otherwise provided in these Regulations, where a registered person—
(a)makes a taxable supply in the United Kingdom to a taxable person

They could be relying on the PVD (2006/112/EC), Article 220 -

Every taxable person shall ensure that, in respect of the following, an invoice is issued, either by himself or by his
customer or, in his name and on his behalf, by a third party:

(1) supplies of goods or services which he has made to another taxable person

[anonymous-user]

I can't think of another defence that uber could come up with though

If it relies on anything other than saying the supply was made by the driver who - likely by virtue of turnover below the threshold - isn't required to be VAT registered, all sorts of hornets' nests risk being poked

That doesn't mean that there isnt another (better) defence btw, just that I don't know enough to know of it

Could Uber's defence to the case brought against it simply be to say something like we didn't supply the service, please contact the driver? Does that close it down?

Again, I'm sure they already thought of this...

Edited by anonymous-user on Tuesday 4th April 20:38

Edited by anonymous-user on Tuesday 4th April 20:45

[Alpinestars]

PF62 said:

Alpinestars said:

Not sure about that.


Save as otherwise provided in these Regulations, where a registered person—
(a)makes a taxable supply in the United Kingdom to a taxable person

They could be relying on the PVD (2006/112/EC), Article 220 -

Every taxable person shall ensure that, in respect of the following, an invoice is issued, either by himself or by his
customer or, in his name and on his behalf, by a third party:

(1) supplies of goods or services which he has made to another taxable person

Have not read the link, but your comment says "taxable person" shall issue. If they are not taxable, it doesn't on the face of it, apply.

[anonymous-user]

PF62 said:

They could be relying on the PVD (2006/112/EC), Article 220 -

Every taxable person shall ensure that, in respect of the following, an invoice is issued, either by himself or by his
customer or, in his name and on his behalf, by a third party:

(1) supplies of goods or services which he has made to another taxable person

I believe there is a receipt for the journey in question, but that it doesn't show VAT

[Alpinestars]

JPJPJP said:

I can't think of another defence that uber could come up with though

If it relies on anything other than saying the supply was made by the driver who - likely by virtue of turnover below the threshold - isn't required to be VAT registered, all sorts of hornets' nests risk being poked

That doesn't mean that there isnt another (better) defence btw, just that I don't know enough to know of it

Could Uber's defence to the case brought against it simply be to say something like we didn't supply the service, please contact the driver? Does that close it down?

Again, I'm sure they already thought of this...

Edited by JPJPJP on Tuesday 4th April 20:38

Edited by JPJPJP on Tuesday 4th April 20:45

I don't think the defence is the point. Uber will say it does not provide transport services. This stance failed in the case brought by the ATS.

The point is, on what basis a case is being brought against Uber if it is not a registered person. That's where there may be an overlap between VAT law and contract law.

[anonymous-user]

The ats case AIUI wasn't about uber being the service provider or not, but whether the service provided by uberX drivers was, for GST purposes, a taxi service

Did I misread it?

[Alpinestars]

JPJPJP said:

The ats case AIUI wasn't about uber being the service provider or not, but whether the service provided by uberX drivers was, for GST purposes, a taxi service

Did I misread it?

No that's right. But one of Uber's arguments is that it's not a transport provider. If you put this ruling together with the employment tribunal, it sets up a good chance that Uber could be subject to VAT.

[PF62]

Alpinestars said:

PF62 said:

Alpinestars said:

Not sure about that.


Save as otherwise provided in these Regulations, where a registered person—
(a)makes a taxable supply in the United Kingdom to a taxable person

They could be relying on the PVD (2006/112/EC), Article 220 -

Every taxable person shall ensure that, in respect of the following, an invoice is issued, either by himself or by his
customer or, in his name and on his behalf, by a third party:

(1) supplies of goods or services which he has made to another taxable person

Have not read the link, but your comment says "taxable person" shall issue. If they are not taxable, it doesn't on the face of it, apply.

"taxable person" has a different meaning in the PVD from the definition in the UK's VAT Act. PVD Article 9 -

‘Taxable person’ shall mean any person who, independently, carries out in any place any economic activity, whatever the
purpose or results of that activity

[Murph7355]

Alpinestars said:

100% enforcing? Are you a tax practitioner and have the experience to know that?
...

I'm not, but have had various dealings with HMRC.

They will be enforcing what they can with what resources they have. And I still don't think it's for Joe Public to interfere in how they are prioritising that enforcement in this way.

Alpinestars said:

...
Don't you think an individual should be able to get a VAT invoice where he believes he should? I know that's disingenuous, but that's the point of him doing it in a way which gives him the ability to challenge it legally. If he has a legal right, are you saying he shouldn't be able to exercise it?

Yes I do. But if the individual is told that the company providing the service is not VAT registered (whether the company is the driver or an intermediary) then that should either be where it ends or report it to HMRC. The only thing they can possibly be losing in not receiving a VAT receipt is being able to offset taxes themselves so HMRC seem to be the right place to direct the queries regardless.

Taking it to the courts just smacks of ulterior motives. Which, of course, will definitely be the case (if it were to simplify our taxation systems I'd have donated to their fund myself...but I don't see that).

Alpinestars said:

...
Does the thickness of the veil matter? His real reason is to ensure Uber pays the tax he and apparently tax QC think it should pay. There is precedent for the tax point in Australia and the UK. So it's a fire with smoke.
...

This is the slippery slope I think we need to avoid though. It's Uber so it doesn't matter. They're big bad tax avoiders and there is no issue with it. But we all need to be careful about this sort of thing.

"Someone" (it's not the lawyer in question just as the Brexit challenge wasn't Gina Miller) thinks someone else isn't paying enough tax so they sue them after drumming up funding from the www. Instead of reporting it the bodies whose job it is to deal with that sort of thing.

If they win the case and it forces HMRC to deal with Uber, what if other more valuable (to the taxpayer) cases have to go by the wayside/be put on hold as resources are diverted? Is that a good thing for the taxpayer?

Alpinestars said:

...
One could argue the whole BEPS movement was brought about by people like the plaintiff who didn't like the tax arbitrage big corporations were taking advantage of.

I don't see BEPS ever having a lasting effect. Tax arbitrage will never go away. It cannot unless you equalise all other systems of national governments into a harmonious global whole. And we're as far away from that point as we ever have been.

I'm genuinely interested to see how this one pans out. And what the unintended consequences will be.

[Alpinestars]

Murph7355 said:

Alpinestars said:

100% enforcing? Are you a tax practitioner and have the experience to know that?
...

I'm not, but have had various dealings with HMRC.

They will be enforcing what they can with what resources they have. And I still don't think it's for Joe Public to interfere in how they are prioritising that enforcement in this way.

So it's not 100% for sure then.

Alpinestars said:

...
Don't you think an individual should be able to get a VAT invoice where he believes he should? I know that's disingenuous, but that's the point of him doing it in a way which gives him the ability to challenge it legally. If he has a legal right, are you saying he shouldn't be able to exercise it?

Murph7355 said:

Yes I do. But if the individual is told that the company providing the service is not VAT registered (whether the company is the driver or an intermediary) then that should either be where it ends or report it to HMRC. The only thing they can possibly be losing in not receiving a VAT receipt is being able to offset taxes themselves so HMRC seem to be the right place to direct the queries regardless.

Taking it to the courts just smacks of ulterior motives. Which, of course, will definitely be the case (if it were to simplify our taxation systems I'd have donated to their fund myself...but I don't see that).

Of course there is an ulterior motive. Those of trying to force corporates to pay their "fair share of tax". That doesn't detract from the legal position.

Alpinestars said:

...
Does the thickness of the veil matter? His real reason is to ensure Uber pays the tax he and apparently tax QC think it should pay. There is precedent for the tax point in Australia and the UK. So it's a fire with smoke.
...

Murph7355 said:

This is the slippery slope I think we need to avoid though. It's Uber so it doesn't matter. They're big bad tax avoiders and there is no issue with it. But we all need to be careful about this sort of thing.

Slippery slope to, and careful of what? They are trying to make a legal challenge.

Murph7355 said:

"Someone" (it's not the lawyer in question just as the Brexit challenge wasn't Gina Miller) thinks someone else isn't paying enough tax so they sue them after drumming up funding from the www. Instead of reporting it the bodies whose job it is to deal with that sort of thing.

If they win the case and it forces HMRC to deal with Uber, what if other more valuable (to the taxpayer) cases have to go by the wayside/be put on hold as resources are diverted? Is that a good thing for the taxpayer?

Who knows whether it's good or bad vis a vis resources.

Alpinestars said:

...
One could argue the whole BEPS movement was brought about by people like the plaintiff who didn't like the tax arbitrage big corporations were taking advantage of.

Murph7355 said:

I don't see BEPS ever having a lasting effect. Tax arbitrage will never go away. It cannot unless you equalise all other systems of national governments into a harmonious global whole. And we're as far away from that point as we ever have been.

Totally disagree with it being as far apart as ever. International tax planning is so much harder now than it has ever been.

Even just 2 actions, 2 and 4, have had a huge impact.

Murph7355 said:

I'm genuinely interested to see how this one pans out. And what the unintended consequences will be.

Ditto.

[Alpinestars]

PF62 said:

Alpinestars said:

PF62 said:

Alpinestars said:

Not sure about that.


Save as otherwise provided in these Regulations, where a registered person—
(a)makes a taxable supply in the United Kingdom to a taxable person

They could be relying on the PVD (2006/112/EC), Article 220 -

Every taxable person shall ensure that, in respect of the following, an invoice is issued, either by himself or by his
customer or, in his name and on his behalf, by a third party:

(1) supplies of goods or services which he has made to another taxable person

Have not read the link, but your comment says "taxable person" shall issue. If they are not taxable, it doesn't on the face of it, apply.

"taxable person" has a different meaning in the PVD from the definition in the UK's VAT Act. PVD Article 9 -

‘Taxable person’ shall mean any person who, independently, carries out in any place any economic activity, whatever the
purpose or results of that activity

Thanks.

[Murph7355]

Alpinestars said:

...
Of course there is an ulterior motive. Those of trying to force corporates to pay their "fair share of tax"....

I suppose philosophically I disagree that any corporate pays tax. Focusing on them doing so is fruitless.

But even if I did, who denotes "fair"? And how likely is it that finding Uber have not been paying their "fair share" (whatever that is) will end up a Pyrrhic victory?

Who is next on Mr Maugham's (or whomever is pulling the strings) hit list in this endeavour toward some notion of "fairness". And what makes "his" opinion on who should and should not appear on that list "right"?

All genuine questions btw. My only bias is in a belief that this is not the right approach for long term good and, indeed, that this sort of action will do no good at all.

Whether BEPS will or not time will tell. But I'm of the opinion that governments have tried to squeeze this sort of thing out for centuries and have failed (witness the size of our tax code). Nations have much to gain from allowing the gaps to exist. And the human race is not ready for a single global state and never will be. It's not in our nature

[The Mad Monk]

Alpinestars said:

One of my best mates is a Black Cabbie, and Uber has decimated his business.

If the world has moved on and the Black Cab system is now outdated and irrelevant, then it should be replaced by something more appropriate to the 21st century.

If this means that one of your best mates should seek alternative employment - then so be it.

[Alpinestars]

The Mad Monk said:

Alpinestars said:

One of my best mates is a Black Cabbie, and Uber has decimated his business.

If the world has moved on and the Black Cab system is now outdated and irrelevant, then it should be replaced by something more appropriate to the 21st century.

If this means that one of your best mates should seek alternative employment - then so be it.

Absolutely. The point about my mate was an aside and to add context. I'm a tax advisor by profession, that's my reason for the interest.

The point about had BCs kept up with the times is a good one, and this case, and that point, could, paradoxically, mean they too will have their takings being subject to VAT without the individual "zero" bands.

[anonymous-user]

JPJPJP said:

If you look at the parties involved in bringing the case, Jolyon Maugham QC, represented by Edwin Coe LLP with Opinion provided by George Peretz QC and Brendan McGurk

They are people and firms that know about VAT. That much is not in any doubt.

There will be an arguable case and experienced lawyers on each side. Pretty much any contested legal dispute will have lawyers arguing different sides of the same coin.

In some instances, particularly small businesses and individuals, there may be an increased tendency to ignore professional advice on the merits or otherwise of pursuing a claim. For an organisation of the scale and resource of Uber, I think it would be unlikely they'd take advice that their case had little merit and still plough on regardless, as these people answer to shareholders who don't like to see profligacy on a whim or grudge.

None of which says I believe Uber will win or lose.

[anonymous-user]

Well, the crowdfunding passed the stretch target before it closed last night

£107,650 has been raised. A characteristically low key announcement on Twitter

https://twitter.com/GoodLawProject/status/85473119...

[anonymous-user]

I admit my UK vat law is 20 years out of date, but can't uber argue they are an agent and not liable for the tax on the value of the transaction. Ok I know a house is out of scope but an estate agent would not be liable for the vat on a house purchase he facilities between a buyer and seller (if the house was in scope) can't uber argue they act as a facilitator between a passenger and a driver? Then they would pay vat in their service, as the estate agent does now.

[Murph7355]

Berw said:

I admit my UK vat law is 20 years out of date, but can't uber argue they are an agent and not liable for the tax on the value of the transaction. Ok I know a house is out of scope but an estate agent would not be liable for the vat on a house purchase he facilities between a buyer and seller (if the house was in scope) can't uber argue they act as a facilitator between a passenger and a driver? Then they would pay vat in their service, as the estate agent does now.

I believe that is the stance Uber are taking.

Good to see The Good Law Project keeping their ego at bay.

I hope they get a judge having a bad hair day

[anonymous-user]

We don't know Uber's stance yet.

We don't know The Good Law Project's specific approach yet either in fact.

But we will soon enough now - the stated intention is to start the case before the end of April.

There are plenty of things that would stack up to form an argument that Uber isn't an Agent and that it is the service provider. Whether the argument is sufficiently strong that a HC Judge agrees or not remains to be seen.

Also, as discussed earlier in the thread, what it actually means if the HC Judge finds in favour of The Good Law Project in whatever case it is that ends up in the court, also remains to be seen.

It is clear that the headline of the case:

TGLP: Uber should give me a VAT receipt
Uber: Uber isn't required to be VAT registered and there is, therefore, no VAT receipt

isn't necessarily going to achieve much.

So TGLP must be aiming to use the case to somehow nudge HMRC towards ruling on whether or not Uber should be registered for VAT, maybe by having the Judge say that it is not possible for her to decide the case without a definitive ruling by HMRC?

I don't know what, if any, sway a HC Judge can have over the machinations of HMRC in terms of VAT registration.

Anyway, TGLP has my tenner, so I have a (small) interest in what happens next.