Uber and VAT

[anonymous-user]

Slight delay versus previously indicated timeframe (Uber case had been mentioned as starting this week)

[anonymous-user]

Some people with knowledge of the machinations of VAT laws are saying that a recently published UTT decision adds weight to the argument that VAT should be charged on Uber fares

https://assets.publishing.service.gov.uk/media/58c...

H/T to @DanNeidle on twitter who picks out a relevant paragraph

[anonymous-user]

The campaign launches today, at 10pm

https://twitter.com/GoodLawProject/status/84384375...

So here it is

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

Maugham wants to raise £75k to start the ball rolling by suing Uber in the high court to give him a receipt for a ride he took

A gizmo do article on the case too

http://www.gizmodo.co.uk/2017/03/meet-the-uk-barri...

Edited by anonymous-user on Monday 20th March 22:18

[anonymous-user]

An interesting tweet on the campaign by Wes Sweeting.... you know, MP, member of the Treasury Select Committee...

https://twitter.com/wesstreeting/status/8441598926...

[anonymous-user]

Yes, it seem weird that a private case of this nature is on the cards

Weird that HMRC is silent on the matter

And weird that an MP / Member of the Treasury select committee pledges to financially support the crowdfunding for the case "after pay day"

https://twitter.com/wesstreeting/status/8441600230...

What's going on??

[anonymous-user]

So far the crowdjustice case has raised £11,243 from 497 backers

There seems to be a bit of interest out there

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

[anonymous-user]

Taxi services are standard rated for VAT so, where the required turnover threshold is reached, the supplier of the service has to be VAT registered

When you take a black cab / mini cab, the provider of the service might not be obvious to you: is it the driver, is it a mini cab firm? Moreover, it might not be obvious to you if the service provider should or should not be registered for VAT. So, your request for a VAT receipt (as opposed to a receipt), may meet with any from a variety of responses.

A minicab firm I use from time to time supplies a VAT invoice for every journey I take with them (based on its drivers being employees). A taxi driver that I have used reasonably frequently does not.

Anyway, here is a thread on a taxi driver's forum referring to a case from way back in 2009 when a taxi firm was found, by the VAT Tribunal, to owe VAT on the account customers it had done business with. It illustrates some key points about how VAT rules are applied to taxi services.

It is a short read! I don't know, without digging a bit, if the case was appealed or not

http://www.taxi-driver.co.uk/phpBB2/viewtopic.php?...

The case that Maugham is making centres on the fact that he says Uber should be VAT registered, but appears not to be. The High Court will be the first stage in the process to judge that claim.

To draw a perfect parallel with the Bath Taxis case would be wrong, but it is about right to say that Maugham is saying that Uber is the principal in the relationship with riders and, as it turns over more than the threshold at which it must register for VAT, it should have done so, but appears not to have.

Maugham goes on to say that if his case is successful, then HMRC could rule that every fare collected by Uber for quite some time included VAT and that money is, therefore, owed to HMRC.

[anonymous-user]

If one of Maugham's objectives was publicity (of which there is no doubt in my mind that it was), then he is doing quite well

Here he is on CNBC (front page at the time of posting)




https://www.cnbc.com/amp/2017/03/24/uber-taxes-vat...

[anonymous-user]

Murph7355 said:

One of?

Also "If" was pretty superfluous in that post wasn't it?!

[anonymous-user]

Well over 50% funded now

Update: now over £50k of the £75k target

Edited by anonymous-user on Wednesday 29th March 04:33

[anonymous-user]

Looks to me like the fund raising is into the home straight

A mystery donor pledging to match the next £20k and a big article in the wail should see it done in short order

https://twitter.com/goodlawproject/status/84696069...

http://www.dailymail.co.uk/news/article-4358770/Do...

[anonymous-user]

I don't know about Hammond, but if there has been a pay day for MPs since 21 March, then Wes Streeting MP (member of the Treasury Select Committee) is.

[anonymous-user]

Alpinestars said:

Whilst I appreciate people seem to be working on this at vastly reduced rates, perhaps even pro bono, 75 or 100k is peanuts to bring a High Court case. And an even bigger hurdle might be if the case goes against HMRC and is then appealed.

Seems to me that's it's taken a long time to raise this money, so they may never be in a position to fight it or appeal it. Probably the best they can hope to achieve is raise awareness and let HMRC (and other tax authorities) make its (their) enquiries in due course.

You are right, the £75k will only just about get them into the High Court.

I expect that much will be made of the fact that the case has been crowdfunded, with small donations, as a way of attempting to show that the case has the support of the public.

What happens then depends on the way the case unfolds and any judgment handed down.

I am really looking forward to it!

[anonymous-user]

Alpinestars said:

People don't spend money on a whim. It's not difficult to see a case where HMRC or the Courts successfully challenge Uber on VAT.

As far as I understand, the people bringing the case have an opinion from a Tax QC which suggests the business could be VATable, and therefore should have issued a VAT invoice. . If it's a flippant claim, I doubt Uber would bother spending much on it. And if it goes against them, because they didn't bother putting a strong enough case forward, they could always appeal the decision.

I also imagine there is a hurdle which needs to be jumped before you or I could take a company to Court. Maybe one of the lawyers (JohnFM) could clarify.

The case is specific. It seeks for the high court to order uber to issue a vat receipt to a rider, in order that the vat may be reclaimed as a legitimate expense.

That will, it seems to be expected, lead to the court needing to rule if uber should be registered for vat or not.

The case is being brought by a tax QC supported by the opinion of another tax QC and a junior and represented by a law firm

AIUI a letter before action has already been issued to uber

I wonder if uber has an easy way out, just by refunding the fare?

Edited by anonymous-user on Wednesday 29th March 20:33

[anonymous-user]

Alpinestars said:

Thanks. I was aware of most of that. No idea on what a refund would do re the case, but they never issue receipts so every ride would "reset" the clock.

Do you mind me asking if you are a Black Cab driver?

I'm not a black cab driver. In fact I am nothing at all to do with any part of the cab / mini cab / taxi business at all in any way

Just an interested observer of the case

[anonymous-user]

Initial target of £75k has been reached

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

[anonymous-user]

Maugham, and others, have made plenty of noise about this for quite a few months now.

HMRC could already be dealing with this, as it does, initially behind closed doors. The first we would likely know about that would probably be a publication of a FTT decision, or VAT suddenly appearing on uber invoices

Edited by anonymous-user on Saturday 1st April 08:05

[anonymous-user]

A small update on the case

https://www.crowdjustice.org/case/uber/ (click on case updates)

Extract

".... we are in a position to commence proceedings against Uber. The legislation gives Uber a period of time to provide us with a VAT receipt - until the middle of this month - and this means we can't sue it until that period of time has run out. But we will not drag our heels. Last week - even before the fundraising target was hit - I asked the barrister team to start drafting the claim again Uber and I hope and expect we will be in a position to start proceedings against them in the High Court before the end of the month. ...."

[anonymous-user]

johnfm said:

I may be missing something here.

Uber says "we are not registered for VAT, so we do not issue VAT receipts".

Is it a court's job to then determine if they should or should not be VAT registered, without the usual enforcement from HMRC?

As a matter of fact, Uber are not VAT registered. As such, they have no obligation to issue a VAT receipt.

Is the court to do the job of HMRC?

I cannot imagine how this would work if, say, I suspected the company doing the IT services for my company were not VAT reg'd when they should be. I'd expect to infomr HMRC and then one might expect HMRC would enforce the relevant laws - and so if Uber are not registered when they should be registered the same enforcement is applied as it would to Tom the plumber or Jolyon the working class barrister.

That is the point Jolyon is trying to make with the case isn't it?

That HMRC should be dealing with this, but that we don't know if it is, or isn't, doing so.

Not even Wes Streeting MP, as a member of the Treasury Select Committee seems to know (or be able to find out) if HMRC is looking at this.

And, on the basis that Jolyon believes that he has sufficient evidence that Uber should be VAT registered, he is prepared to take it to court (with other people's money) as a way of starting a process by which Uber's liability (or lack of) to register for VAT does get examined - in as public a way as possible.

Asking for a VAT receipt is the initial step in that process (done already). Jumping straight to the HC if a VAT receipt is not forthcoming is a big step, but one that he is perfectly entitled to attempt to do.

If it makes it to trial, it could go nowhere very quickly, or it could become something of a landmark case for a number of reasons.

[anonymous-user]

essayer said:

Interested to know legally how you can force someone to give you 'a receipt'
Is there some law or regulation ?

In cases where there is a VAT element to the cost, then yes, there is indeed a legal requirement to issue a receipt.

Generally speaking, a VAT invoice / receipt must be issued within 30 days of the date of the supply of the goods / service, or the date of payment.

It isn't a link to the specific legislation, but there is a bit about it here https://www.gov.uk/vat-record-keeping/vat-invoices