Discussion
havoc said:
Investors will have to suck it up - they own share capital, that is all. They can of course vote-out the current management team.
Creditors - as long as Uber is solvent they won't care. If Uber stops being solvent they will care a lot, but it'll be tough luck. Of course, HMR&C is no longer a preferential creditor, so if this appeal is successful and turns Uber insolvent it could collapse Uber in the UK...at which point very few people will get any money...
It's not an "appeal", is it? It's a "private individual" suing a company....? (Not totally au fait with legal parlance so may be missing something).Creditors - as long as Uber is solvent they won't care. If Uber stops being solvent they will care a lot, but it'll be tough luck. Of course, HMR&C is no longer a preferential creditor, so if this appeal is successful and turns Uber insolvent it could collapse Uber in the UK...at which point very few people will get any money...
Regardless, your last sentence would be a great result. For someone.
Mrr T said:
skwdenyer said:
The issues with Uber are manifold, but include:
If you want to be taken seriously when discussing tax you really should do some research. The structure does not reduce UK tax it reduces US tax. If you read the article you linked to it even refers to US not UK taxes.- Uber are using cross-border accounting to siphon money out of the UK, an option clearly not available to the majority of market participants (see http://fortune.com/2015/10/22/uber-tax-shell/ for instance)
The irony of the structure is that Uber does not make a profit anywhere in the world. So there is no need to shield profits.
Uber revenue may have risen in 2016 but it still lost $2.8bn.
The business model is to undercut the competition become the dominant supplier when it will then make money. The fact is it’s not working and does not look as if it will. It’s just a matter of how long the funding lasts till the doors close.
In the interim enjoy a great app and cab fares subsidised by Uber investors and creditors.
The EU ideal is cross-border trade. But it is an imperfect system that creates major inequalities. There is no proper "free market for services" - it simply doesn't exist. It is right and proper for UK citizens to challenge the operation of a trans-national company (one whose entire business model is based upon a degree of illegality in many if not most markets it has operated in) which competes in ways realistically not open to them.
skwdenyer said:
Mrr T said:
skwdenyer said:
The issues with Uber are manifold, but include:
If you want to be taken seriously when discussing tax you really should do some research. The structure does not reduce UK tax it reduces US tax. If you read the article you linked to it even refers to US not UK taxes.- Uber are using cross-border accounting to siphon money out of the UK, an option clearly not available to the majority of market participants (see http://fortune.com/2015/10/22/uber-tax-shell/ for instance)
The irony of the structure is that Uber does not make a profit anywhere in the world. So there is no need to shield profits.
Uber revenue may have risen in 2016 but it still lost $2.8bn.
The business model is to undercut the competition become the dominant supplier when it will then make money. The fact is it’s not working and does not look as if it will. It’s just a matter of how long the funding lasts till the doors close.
In the interim enjoy a great app and cab fares subsidised by Uber investors and creditors.
The EU ideal is cross-border trade. But it is an imperfect system that creates major inequalities. There is no proper "free market for services" - it simply doesn't exist. It is right and proper for UK citizens to challenge the operation of a trans-national company (one whose entire business model is based upon a degree of illegality in many if not most markets it has operated in) which competes in ways realistically not open to them.
Operated correctly, the structure is set up to reduce U.S. taxes. Reduction of UK tax is a red herring, ie, a UK company would expect to pay for the use of IP in any event.
skwdenyer said:
.
Uber's argument is that their platform puts the customer directly in touch with the driver - the customer offers, the driver accepts, the contract is formed.
To hold a private hire operators licence in the UK the operator has to accept the job not the driver. Uber's argument is that their platform puts the customer directly in touch with the driver - the customer offers, the driver accepts, the contract is formed.
Edited by skwdenyer on Saturday 27th May 12:04
Alpinestars said:
Sucking money out of the UK as you put it, is not illegal. Set up properly, most jurisdictions require the IP holder to charge for the IP, eg, if the IP was located in the UK, the UK tax rules would require it to charge for it's use. The question is whether the UK is charged too much. That's a transfer pricing question.
Operated correctly, the structure is set up to reduce U.S. taxes. Reduction of UK tax is a red herring, ie, a UK company would expect to pay for the use of IP in any event.
The part of the structure that reduces US taxes will, whatever the outcome of the VAT case, still work to reduce US taxes though won't it? Operated correctly, the structure is set up to reduce U.S. taxes. Reduction of UK tax is a red herring, ie, a UK company would expect to pay for the use of IP in any event.
AIUI that is achieved - in layman's terms - by accruing the profit outside the US jurisdiction and never repatriating it
The part of the structure through which Uber currently claims the right that fares generated through its system should not be subject to UK VAT is the part under threat from the case
JPJPJP said:
Alpinestars said:
Sucking money out of the UK as you put it, is not illegal. Set up properly, most jurisdictions require the IP holder to charge for the IP, eg, if the IP was located in the UK, the UK tax rules would require it to charge for it's use. The question is whether the UK is charged too much. That's a transfer pricing question.
Operated correctly, the structure is set up to reduce U.S. taxes. Reduction of UK tax is a red herring, ie, a UK company would expect to pay for the use of IP in any event.
The part of the structure that reduces US taxes will, whatever the outcome of the VAT case, still work to reduce US taxes though won't it? Operated correctly, the structure is set up to reduce U.S. taxes. Reduction of UK tax is a red herring, ie, a UK company would expect to pay for the use of IP in any event.
AIUI that is achieved - in layman's terms - by accruing the profit outside the US jurisdiction and never repatriating it
The part of the structure through which Uber currently claims the right that fares generated through its system should not be subject to UK VAT is the part under threat from the case
An update posted by The Good Law Project includes links to
Letter to Uber's solicitors
Pleadings
Response Pack
Application for costs protection
Witness Statement
Exhibit to Witness statement
Here is a link to the full update, the Uber section is the second topic covered
http://mailchi.mp/goodlawproject/good-law-project-...
The particulars of the claim are
Letter to Uber's solicitors
Pleadings
Response Pack
Application for costs protection
Witness Statement
Exhibit to Witness statement
Here is a link to the full update, the Uber section is the second topic covered
http://mailchi.mp/goodlawproject/good-law-project-...
The particulars of the claim are
Edited by anonymous-user on Monday 26th June 11:06
JPJPJP said:
That is the obvious defence and is addressed in the witness statement linked to in the update above, as per
...
None of which changes my opinion of the bloke bringing the action....
He notes that the tax position etc isn't for the courts to decide but makes a whole paragraph or more in his case on it.
He's using the courts (I'd argue wasting court time) to serve his own agenda. The sole objective he has is around the tax situation. He should have passed his concerns to HMRC and let them deal with it. HMRC's relationship with Uber is no more his business than his own relationship with HMRC is Uber's. Changing that sets dodgy precedents no matter how he tries to dress it up.
Murph7355 said:
None of which changes my opinion of the bloke bringing the action.
He notes that the tax position etc isn't for the courts to decide but makes a whole paragraph or more in his case on it.
He's using the courts (I'd argue wasting court time) to serve his own agenda. The sole objective he has is around the tax situation. He should have passed his concerns to HMRC and let them deal with it. HMRC's relationship with Uber is no more his business than his own relationship with HMRC is Uber's. Changing that sets dodgy precedents no matter how he tries to dress it up.
I wouldn't argue particularly vigorously against all the points you make, other than to say the courts are more than capable of identifying and dealing with vexatious / frivolous litigationHe notes that the tax position etc isn't for the courts to decide but makes a whole paragraph or more in his case on it.
He's using the courts (I'd argue wasting court time) to serve his own agenda. The sole objective he has is around the tax situation. He should have passed his concerns to HMRC and let them deal with it. HMRC's relationship with Uber is no more his business than his own relationship with HMRC is Uber's. Changing that sets dodgy precedents no matter how he tries to dress it up.
JPJPJP said:
I wouldn't argue particularly vigorously against all the points you make, other than to say the courts are more than capable of identifying and dealing with vexatious / frivolous litigation
Agreed. Though am not sure they're particularly consistent in this and often things seem to go the whole way through court proceedings that on the face of it should just be kicked into touch before they get that far.(There is, of course, much danger in thinking like this from what is reported in the media and across other outlets
).I hadn't noted previously that the Uber entity that the action is being taken against is VAT registered
A quick glance at the last filed accounts for Uber London Ltd shows that there is indeed a fairly chunk VAT receivable (note 11) of £2.3m
So, AIUI (& I stand to be corrected here), Uber London derives revenue only from other Uber companies and practically all of that will be zero rated or through a reverse charge mechanism meaning that there is little or liability arising in the UK. It can (and does), however, rightly reclaim VAT arising from its costs.
A quick glance at the last filed accounts for Uber London Ltd shows that there is indeed a fairly chunk VAT receivable (note 11) of £2.3m
So, AIUI (& I stand to be corrected here), Uber London derives revenue only from other Uber companies and practically all of that will be zero rated or through a reverse charge mechanism meaning that there is little or liability arising in the UK. It can (and does), however, rightly reclaim VAT arising from its costs.
skwdenyer said:
It is interesting to read opinions of people who say something like "come on, why do you care, this isn't your problem? can't you just let people get on with things?" etc. Speaking only personally, I find it strange to walk through life turning a blind eye to things that are - to me - just wrong.
Uber claims to be a "marketplace" but in reality it is nothing of the sort; there's no competition for different offerings or pricing between marketplace participants. Every participant has to sell the same thing, in the same way, at the same price, under Uber's terms and using Uber's payment method.
As a society, we've grown used to this sucking out of money by internet companies like Google - after all, they deliver their services virtually, from anywhere. But sucking money out of the economy, tax-free, for a physical service delivered to your door? That sucks. That's a different rubicon. Uber can, and should, be held accountable.
In my view, it is not wrong for a concerned citizen or two to bring a court action against a company for an abuse. If the claim is without any foundation, it will be thrown out. Uber is worth so many $billions that the legal fees are a non-issue for them. A sane government would have already noticed this tide in sentiment and announced an investigation or - even better - done something. In the absence of that, and in a sad but established tradition in this country, the first shots must be fired by individuals.
Actions like this are - I hope - a portent of far more direct action against multinational interests, where those run so clearly counter to the interests of the average citizen.
Just my two pence worth...
It's worse than that, osbourne, effectively at the time the second most powerful person in the uk was trying to derail any attempts to investigate the tax issue. At least in India they actually call it corruption..,.Edmund Burke said:
All that is necessary for the triumph of evil is that good men do nothing.
The issues with Uber are manifold, but include:- Uber are using cross-border accounting to siphon money out of the UK, an option clearly not available to the majority of market participants (see http://fortune.com/2015/10/22/uber-tax-shell/ for instance)
- the charge-by-the-mile-in-London model was one begged-for over many years by other players (e.g. Addison Lee), but refused by the PCO - it was only Uber's "might is right" approach (and their lack of risk, as they claimed to not be the service provider and did not own cars) that in essence forced that through
- Uber's terms are just not the same as the typical minicab operator - there are intrinsic differences
Uber claims to be a "marketplace" but in reality it is nothing of the sort; there's no competition for different offerings or pricing between marketplace participants. Every participant has to sell the same thing, in the same way, at the same price, under Uber's terms and using Uber's payment method.
As a society, we've grown used to this sucking out of money by internet companies like Google - after all, they deliver their services virtually, from anywhere. But sucking money out of the economy, tax-free, for a physical service delivered to your door? That sucks. That's a different rubicon. Uber can, and should, be held accountable.
In my view, it is not wrong for a concerned citizen or two to bring a court action against a company for an abuse. If the claim is without any foundation, it will be thrown out. Uber is worth so many $billions that the legal fees are a non-issue for them. A sane government would have already noticed this tide in sentiment and announced an investigation or - even better - done something. In the absence of that, and in a sad but established tradition in this country, the first shots must be fired by individuals.
Actions like this are - I hope - a portent of far more direct action against multinational interests, where those run so clearly counter to the interests of the average citizen.
Just my two pence worth...
Murph7355 said:
At the expense of which other investigations the HMRC might have on its plate...? Why is it the GLP's role in life to try and drive the priorities? And on what basis are they doing so?
Surely HMRC's capacity for a handling a valid investigation, or any preference it might have for investigating one matter over another is of no concern to GLP, or even the High Court?If the judgment is that Uber should have been charging VAT on fares and HMRC has done nothing to enforce that, it would, surely, be a very serious failing by HMRC?
This action by GLP has been publicised sufficiently widely and for long enough now that there is no doubt at all that HMRC knows that it exists - I would say since March of this year at the very latest.
That being the case, someone at HMRC must have looked at the matter.
It might take the High Court case for Uber (and / or, but far less likely, HMRC) to make it public that HMRC is conducting some form of investigation (or has conducted, maybe even concluded, such an investigation).
If that happens, then the HC would, almost certainly, say that the GLP case must wait for the outcome of that investigation before it can be concluded.
HMRC is unlikely to say anything of course and I can't make my mind up at what point in the progress of this case Uber would play that card (if indeed it has that card) to best affect.
That being the case, someone at HMRC must have looked at the matter.
It might take the High Court case for Uber (and / or, but far less likely, HMRC) to make it public that HMRC is conducting some form of investigation (or has conducted, maybe even concluded, such an investigation).
If that happens, then the HC would, almost certainly, say that the GLP case must wait for the outcome of that investigation before it can be concluded.
HMRC is unlikely to say anything of course and I can't make my mind up at what point in the progress of this case Uber would play that card (if indeed it has that card) to best affect.
JPJPJP said:
Surely HMRC's capacity for a handling a valid investigation, or any preference it might have for investigating one matter over another is of no concern to GLP, or even the High Court?
If the judgment is that Uber should have been charging VAT on fares and HMRC has done nothing to enforce that, it would, surely, be a very serious failing by HMRC?
IMO HMRC's relationship with Uber is no business of the GLP whatsoever, nor the HC's (unless one or the other direct party makes it so). It has no business using the courts this way.If the judgment is that Uber should have been charging VAT on fares and HMRC has done nothing to enforce that, it would, surely, be a very serious failing by HMRC?
This action looks to me like a very thinly veiled attempt to get the HMRC to investigate it's relationship with Uber. GLP has no idea (it would seem, and nor should it) whether HMRC is already investigating Uber, has investigated Uber or will investigate Uber. The assumption as a customer should be that Uber's relations with HRMC are above board. If they think not, report it to HMRC and leave it with them (the designated VAT collecting authority) to deal with it.
HMRC may have 1,000 far more important/compelling cases to be dealing with which may have meant they have yet to get around to Uber. We don't know (and frankly nor should we). GLP seem to want to force that hand for some reason. Why? And is this in the public interest?
IMO, no it isn't. And it sets a very, very dangerous precedent which is far from "good law". I suspect it's not inconceivable for a party to get a competitor wrapped up in legal proceedings based on nothing more than a belief that the competitor isn't paying tax when that competitor has a relationship with the tax authorities that is already scrutinised. I don't think that is healthy - Uber are a large firm who will be lawyered to the max. So I doubt they are losing too much sleep over this. But that sort of aggravation could easily put small firms out of business.
Would it be a failing of the HMRC's if they had yet to deal with Uber? Probably, yes. A "serious" one? That depends on what else they have been doing. If they've been chasing Mrs Miggins for 48p whilst letting Uber off of billions in unpaid taxes them yes. But if they've not got round to chasing Uber for billions because they've been chasing 1,000 other firms for 10x that amount, then no.
You have to assume that if they felt the gains were of those orders of magnitude, however, they would have secured extra resources to recoup the money
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