Uber and VAT

[anonymous-user]

Maugham says it is now "reasonably clear that, following Good Law Project's decision to issue the judicial review against HMRC, HMRC has assess Uber to VAT"

https://twitter.com/GoodLawProject/status/11959627...

https://www.dropbox.com/s/vsej2y0hcvdlzqw/Good%20L...

[anonymous-user]

The court says that the existence, or not, of a protective assessment can be made public

https://www.dropbox.com/s/f3prcbho4e6rmsr/Approved...

Edited by anonymous-user on Tuesday 19th November 17:57

[anonymous-user]

I am not sure which of the 97 Uber threads to put this on, but will try here. Uber has lost its licence. It may be that legal fisticuffs shall ensue.

Please excuse American spelling of licence in link below.


https://www.cnbc.com/2019/11/25/uber-stripped-of-i...

[anonymous-user]

Undoubteldy an appeal will follow

Meanwhile, I'm watching for the SEC filing here

https://investor.uber.com/financials/default.aspx

[anonymous-user]

Whether to implement a to suspend a decision pending an appeal is always a tricky one. Should Mr Crim go to jail while waiting to see if the Appeal Court thinks that he is Mr Not Crim? Should Contract Breaker Ltd pay a zillion dollars in damages whilst waiting to see if the Appeal Court thinks that it is Contract Upholder Ltd? And so on...

[anonymous-user]

Tfl made the decision. The Mayor was involved, but did not make the decision alone. The chances of an appeal succeeding on the grounds of Mayoral bias do not look very promising.

[anonymous-user]

Uber has, predictably, appealed the High Court decision relating to whether HMRC can say if it is has assessed Uber to VAT (the original decision was that the information could be made public)

That doesn't change whether or not HMRC has assessed Uber to VAT, just the right of anyone except Uber and HMRC to know...

[anonymous-user]

Uber has permission to ask the appeal court to overturn the high court decision that said HMRC could tell the public if it had, or had not, assessed uber to vat

[anonymous-user]

Noises now that uber has been assessed to £1.5bn of VAT

That’s quite a chunk of poke

Whether HMRC has any real prospect to collect (any of) it remains to be seen. But if it has raised the assessment, it thinks it can.

https://twitter.com/goodlawproject/status/12326304...

[anonymous-user]

Macski said:

Companies should pay cooperation tax, rates and actually gain from VAT tax.

It is true the rules are the same for everyone but the larger you are the more you can advantage of the rules which should be simplified so there are no get out opportunities if your big enough to take advantage of them

I like this idea of "cooperation tax". It sounds very cuddly!

VAT is pretty much neutral once a business is actively trading - the business sets off the VAT that it pays on things that it buys against the VAT that it charges on things it sells, so VAT isn't really a gain for the business.

As for simplification - all desire it in all things, but in reality simplification rarely works outside engineering (and even there it has its penalties, often called "my Lotus is broken again"). That is why Bloke In Pub is usually wrong about most subjects.

BTW, re "VAT Tax", have a think about what the T in VAT stands for. See also: PIN, RAC, etc.

[anonymous-user]

Eric Mc said:

I don't see anywhere in those Twitter comments that HMRC has actually assessed Uber in the UK for £1.5 billion unpaid VAT.

That is what the Court of Appeal case on 1 / 2 April is about Eric: The High Court ruled that HMRC could & should confirm the details of any assessment. Uber has appealed against that. Until that Appeal is heard, HMRC will not say either way on the record.

Meanwhile, this is being stated openly on twitter. Which wouldn't happen without reasonable consideration.

[anonymous-user]

Bored Online Likes Looking at Old Crumpet Knicker Shots.

[anonymous-user]

Eric Mc said:

Only a bit of unsubstantiated waffle then.

Pretty much.

That said, Uber has booked an estimated liability for the VAT in it's SEC filings. Up until the Court of Appeal ruling then, without knowing the specific sources alluded to in that tweet, that is the best available, attributable, evidence that could in any way substantiate the waffle

Also common sense leads one to wonder if Uber would carry the cost of an appeal (that it may or may not win) if the outcome of losing was for HMRC to share the good (to Uber) news that it had not assessed it to a whacking great big VAT bill

[anonymous-user]

Eric Mc said:

It would be the largest VAT assessment ever issued in the UK if it was.

The question is, why didn't HMRC not query Uber's VAT status much, much earlier?

That is indeed the question and it has been covered earlier in this thread. It was answered in parliament by the then permanent secretary along the lines of "we've lost 5 agent / principal cases in court and we don't want to try a 6th unless there is something that convinces us we might win"

It is Q88 - 92 in this document https://publications.parliament.uk/pa/cm201719/cms...

[anonymous-user]

At the end of Q4 2019 Uber had $11.3 billion cash & equivalents

So a £1.5 biillion vat bill would hurt, but it could come through it

[anonymous-user]

Mrr T said:

Breadvan72 said:

VAT is pretty much neutral once a business is actively trading - the business sets off the VAT that it pays on things that it buys against the VAT that it charges on things it sells, so VAT isn't really a gain for the business.

You are wrong Uber gain substantial from the current VAT treatment. They and their customers would be seriously impacted by the treatment proposed by the Good Law Project.

Please read the post I was replying to. That post and my reply refer to VAT registered businesses.

[anonymous-user]

Eric Mc said:

If a business model is based on being outside the scope of VAT, it will price accordingly. If it is told, years down the line that it needs to charge VAT on its income and, what's more, owes £1.5 billion on historic sales - VAT it never had collected from the customers and now cannot as they cannot go back to past customer transactions and ask them to pay VAT on these historic sales, that would effectively bankrupt them.

It won't because they'll have access to the cash, one way or another. What I expect it would mean is their pricing needing to rise by 20% or they absorb reduced margin (or they squeeze their drivers to).

Not looked at their accounts so no idea if there's a provision and cash set aside for the potential VAT liability.

[anonymous-user]

Mind reading not being an actual thing, you have no idea of my understanding of VAT issues, and having done several cases for the government on VAT, I won't be attending any lectures by you on the subject, but thanks all the same.

[anonymous-user]

Macski said:

That is cool!

So the way to make tax law better is make it more complex?

T stands for tax I do believe which companies claim back, well these that are registered for VAT do, is that not an advantage? it was when I had a business made things 17.5% cheaper!

It made things about 15% cheaper.

[anonymous-user]

Eric Mc said:

They can factor in the VAT element for future sales by hiking their prices. The problem is with any backlog of VAT on historic sales. They can't do anything about that apart from taking it on the chin. You need an awfully strong chin to take a £1.5 billion blow.

At the risk of repeating myself, Uber's chin is pretty sturdy

"At the end of Q4 2019 Uber had $11.3 billion cash & equivalents

So a £1.5 biillion vat bill would hurt, but it could come through it"