Uber and VAT

[Alpinestars]

Murph7355 said:

Alpinestars said:

Which could open the door that the GLP want opening.

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?

It's not at the expense of anything. If HMRC has an assessment or investigation running, that will run parallel. They are not mutually exclusive.

As someone else has already pointed out, some people take it upon themselves to either highlight issues or fight them. We all know it's the job of police officers to prevent crime. That doesn't stop some of us joining in.

You already know the basis, ie, a lawful request for a VAT receipt.

[Murph7355]

Alpinestars said:

It's not at the expense of anything. If HMRC has an assessment or investigation running, that will run parallel. They are not mutually exclusive.

HMRC has finite resources. It will not be able to investigate everything immediately.

If they do, then we need to reconsider how many people it is employing and the rules that people have to play by such that large volumes of people are required.

Legal request for a VAT receipt - they asked, they were told the contract is not with Uber, it's with a driver. Who I believe was not VAT registered. No VAT to claim back. If you believe different for your 64p, report it to HMRC. Have they done this? If not, why not? What was the response? This case is not about the legal request for a VAT receipt. That much I do know because no right minded individual would do that for 64p

Are they trying to nail Uber? Or prove that the tax system and its policing isn't fit for purpose? Both? I'd be much comfier if they were transparent about what they were trying to achieve. But even then I'm not sure this is a good way of doing that.

If they win, do you think this sets safe precedent?

[Alpinestars]

Murph7355 said:

Alpinestars said:

It's not at the expense of anything. If HMRC has an assessment or investigation running, that will run parallel. They are not mutually exclusive.

HMRC has finite resources. It will not be able to investigate everything immediately.

If they do, then we need to reconsider how many people it is employing and the rules that people have to play by such that large volumes of people are required.

Legal request for a VAT receipt - they asked, they were told the contract is not with Uber, it's with a driver. Who I believe was not VAT registered. No VAT to claim back. If you believe different for your 64p, report it to HMRC. Have they done this? If not, why not? What was the response? This case is not about the legal request for a VAT receipt. That much I do know because no right minded individual would do that for 64p

Are they trying to nail Uber? Or prove that the tax system and its policing isn't fit for purpose? Both? I'd be much comfier if they were transparent about what they were trying to achieve. But even then I'm not sure this is a good way of doing that.

If they win, do you think this sets safe precedent?

Wow so much angst. You do realise I'm not the plaintiff?

If HMRC has investigated it and concluded it's fine, I'm sure that will come out during the course of the case if it gets that far. If HMRC has not investigated it, they might be getting a leg up using private money. Win win.

Why so much angst?

[Murph7355]

Alpinestars said:

Wow so much angst. You do realise I'm not the plaintiff?

If HMRC has investigated it and concluded it's fine, I'm sure that will come out during the course of the case if it gets that far. If HMRC has not investigated it, they might be getting a leg up using private money. Win win.

Why so much angst?

There is none. I even used a smilie to try and get that across. (There's another).

Yes I realise you're not the plaintiff.

I've never used Uber successfully. The couple of times I've tried it didn't work. Do I think it's a great idea? IME not really. And looking at the profits they've not made, as a business idea it appears to have its flaws. Though technologically I can see some great opportunity there.

I merely think that using the courts in this way is unhealthy. If there's a really good reason for doing so, so be it. But the people bringing the case are not prepared to make their objectives, noble or otherwise, clear. Even if they called themselves the Good Tax Project I might have more sympathy with the cause.

As asked before - you can't see anything wrong with the precedent this could potentially set?

Have another for good measure.

[Alpinestars]

Murph7355 said:

Alpinestars said:

Wow so much angst. You do realise I'm not the plaintiff?

If HMRC has investigated it and concluded it's fine, I'm sure that will come out during the course of the case if it gets that far. If HMRC has not investigated it, they might be getting a leg up using private money. Win win.

Why so much angst?

There is none. I even used a smilie to try and get that across. (There's another).

Yes I realise you're not the plaintiff.

I've never used Uber successfully. The couple of times I've tried it didn't work. Do I think it's a great idea? IME not really. And looking at the profits they've not made, as a business idea it appears to have its flaws. Though technologically I can see some great opportunity there.

I merely think that using the courts in this way is unhealthy. If there's a really good reason for doing so, so be it. But the people bringing the case are not prepared to make their objectives, noble or otherwise, clear. Even if they called themselves the Good Tax Project I might have more sympathy with the cause.

As asked before - you can't see anything wrong with the precedent this could potentially set?

Have another for good measure.

Oh come on. I do think their reasons are pretty transparent. Don't you? There can only really be 2 reasons, either to expose Uber's tax position to try to increase the UK's tax take, or to level the playing field on behalf of other can operators.

Healthy or unhealthy, the challenge is a lawful one. So we have to respect it.

Just to make it clear, my main reason for following this is because I'm a tax practitioner. So I'm not taking any sides, I sadly just have an interest in the case from a technical perspective.

[anonymous-user]

Uber's analysis of the nature of the relationship it has with users of Uber taxi rides has been rejected by i) a UK Employment Tribunal and ii) advocate general Szupnar of the ECJ

Neither of those opinions is binding yet: i) is subject to appeal and ii) awaits the verdict of the full court, but:

In i) the case was brought by Messers Aslam, Farrar and Others. I can see sufficient parallels between them (rather than HMRC / DWP / some other official agency) bringing that case and Maugham bringing this one for me to be comfortable that it is OK for him to attempt to use the High Court in this way

Similarly, in ii) the case was brought by an association of Barcelona taxi drivers. I can also see sufficient parallels between them (rather than a Spanish taxi regulator or some other official agency) bringing this case ... etc.

If the HC decides that the case has no merit and throws it out, so be it.

If the HC decides there is insufficient public interest to agree to the protection from costs that Maugham seeks, so be that too.

In the documents linked to earlier, the broader reasons behind GLP bringing the case are outlined (did you have the time yet to read them, particularly the witness statement?). The tone in which they are presented could (imo) influence a HCJ either way: to lean towards doing everything possible for the case to be heard in glorious detail with no financial risk to Maugham, or to immediately dismiss the whole thing as some sort of showboating that has no business being in court and to award costs in Uber's favour.

Neither would surprise me.

I don't buy the theory that some are considering that has HMRC / government choosing to allow large MNCs to operate here with scant regard to UK taxation & employment law. But I can see how the evidence that its supporters build that theory on could be seen to point that way.

[maffski]

JPJPJP said:

Uber's analysis of the nature of the relationship it has with users of Uber taxi rides has been rejected by i) a UK Employment Tribunal and ii) advocate general Szupnar of the ECJ

Just because a driver is a worker for the purposes of employment law it doesn't mean they are a worker for the purposes of tax law.

For example contractors caught by IR35 are workers for tax purposes but not for employment law.

[anonymous-user]

maffski said:

Just because a driver is a worker for the purposes of employment law it doesn't mean they are a worker for the purposes of tax law.

For example contractors caught by IR35 are workers for tax purposes but not for employment law.

100% correct and I am not saying it does.

I was using it as an example to show that a case that some might expect to be brought by "an Authority" could legitimately be brought by a concerned individual.

So, just as Messers Aslam, Farrar and Others legitimately brought the ET , Maugham can - I contest - legitimately bring the VAT case.

It doesn't have to be HMRC bringing the VAT case any more than it had to be an Authority bringing the ET.

The outcome of the ET has minimal bearing on the outcome of the VAT case, just as the VAT case (whichever way it goes) will have minimal bearing on any Appeal against the ET decision.

[Murph7355]

JPJPJP said:

...

It doesn't have to be HMRC bringing the VAT case any more than it had to be an Authority bringing the ET.

....

It's incredibly different IMO.

The employment tribunal was brought by "employees" (/"workers"/etc) wasn't it? They had direct skin in the game with the party they took to court.

With Maugham, he was advised by the company he is making the charge against that the contract is not with them but with the driver. Further he's saying he can't reclaim the VAT in his fare.

If he has a beef it's surely either with the driver in that case (I'm assuming the driver gave him a receipt...when you get a receipt from an Uber driver, is it on Uber stationery*?) or with HMRC if he's really upset by not being able to claim the 64p back.

I guess I struggle with the concept of random individuals taking parties to the High Court on spurious grounds when there are channels to address problems already that one can only assume have not been exhausted yet. It doesn't seem like good use of the systems we have in place, especially when it feels like the primary objective is to give a lawyer his 15mins of fame.

Edit - just looked at their own help system which is giving more than a hint of an impression that they're further in the loop than they would like Though apparently "UberTaxi" has some differences (where invoicing is concerned). Let's see which avenue the courts take.

[anonymous-user]

Remember that the case is crowd funded (including by many taxi drivers and some of their representative bodies) and, depending on the costs situation, might not even end up being fronted by Maugham anyway.

I do think there are many points at which this could unfold in opposite ways and that it does have the potential to set quite a few precedents that could be quite interesting

There is no doubt Maugham is looking for publicity, but I do think he sincerely believes the case is a valid one to bring in the way he has chosen from the options he describes in the documents linked earlier

[Murph7355]

JPJPJP said:

...

There is no doubt Maugham is looking for publicity, but I do think he sincerely believes the case is a valid one to bring in the way he has chosen from the options he describes in the documents linked earlier

He is only worried about his standing.

The precedents are the dangerous thing here.

Let's see how well placed trust in our legal system is

[skwdenyer]

600 people complained and were unheard over many months about fire safety at Grendel Tower. If one had taken the Council to court maybe something would have happened. Instead, maybe 1/6 of that number perished.

Sometimes authority is blind, crooked, inefficient, or deluded in some other way.

In fire terms, people die. In commerce, businesses die.

Those who think somebody who believes something is very wrong is themselves wrong to take action is, frankly, deluded in my view.

[anonymous-user]

It is in the FT again today

https://www.ft.com/content/19c1afe8-5a8f-11e7-b553...

extract that summarises the case

1 side

The allegations in the case are small beer. Mr Maugham, a barrister at Devereux Chambers, argues that Uber was providing him with a service when he took a £6.34 ride from his office to meet a client, and is therefore obliged to provide him with a VAT receipt.

If Uber was deemed to be a service provider, it would theoretically have to collect VAT of 20 per cent of every fare and give it to HM Revenue & Customs.

and the other

Uber says it has no obligation to collect VAT or provide a receipt. It argues that it is only acting as an agent for self-employed drivers, rather than a service provider.

A spokesman for Uber said: “Drivers who use our app provide transportation services to passengers and will be registered for VAT if they meet the threshold set by government.” The VAT threshold is £85,000, an income most Uber drivers are unlikely to cross.

“This has been the case across the taxi and private hire industry for decades. Black cab drivers, and the apps they use, operate in exactly the same way. This claim is fundamentally flawed on a number of levels,” Uber added.

[johnfm]

Murph7355 said:

Alpinestars said:

Wow so much angst. You do realise I'm not the plaintiff?

If HMRC has investigated it and concluded it's fine, I'm sure that will come out during the course of the case if it gets that far. If HMRC has not investigated it, they might be getting a leg up using private money. Win win.

Why so much angst?

There is none. I even used a smilie to try and get that across. (There's another).

Yes I realise you're not the plaintiff.

I've never used Uber successfully. The couple of times I've tried it didn't work. Do I think it's a great idea? IME not really. And looking at the profits they've not made, as a business idea it appears to have its flaws. Though technologically I can see some great opportunity there.

I merely think that using the courts in this way is unhealthy. If there's a really good reason for doing so, so be it. But the people bringing the case are not prepared to make their objectives, noble or otherwise, clear. Even if they called themselves the Good Tax Project I might have more sympathy with the cause.

As asked before - you can't see anything wrong with the precedent this could potentially set?

Have another for good measure.

How could you fail to use Uber successfully? It is astoundingly simple to use.

Or do you mean you were in an area with no Uber drivers nearby?

[superlightr]

skwdenyer said:

600 people complained and were unheard over many months about fire safety at Grendel Tower. If one had taken the Council to court maybe something would have happened. Instead, maybe 1/6 of that number perished.

Sometimes authority is blind, crooked, inefficient, or deluded in some other way.

In fire terms, people die. In commerce, businesses die.

Those who think somebody who believes something is very wrong is themselves wrong to take action is, frankly, deluded in my view.

I see it this way as well. When you see something that shouldn't be, perhaps you complain about to the 'correct' authority but its still not dealt to your satisfaction with then I think its a morally correct thing to do to try and take it further which includes court action if you are legally entitled to do so.

If I were a black cab driver then I would want this looked into by HMRC quickly and if they don't and its legal to do so then start a court action. I can see that time is of the essence in that uber will be damaging black cabs and perhaps not playing fair with regards to VAT. Why should blackcabs wait and wait for HMRC to get its act into gear when said action of uber may well destroy the black cabs whilst waiting for HMRC.

[hunton69]

A private hire operator who accepts a job from a customer and takes payment via a credit card only pays Vat on the profit of the job as the operator acts as a broker.
As an example the job is £10 and the driver gets paid £8 the profit is £2 therefore the Vat liability is £0.40


Uber appears to get away without paying Vat as the transaction is made overseas.

[anonymous-user]

The wheels of justice are turning



https://twitter.com/GoodLawProject/status/88037911...

[Murph7355]

johnfm said:

How could you fail to use Uber successfully? It is astoundingly simple to use.

Or do you mean you were in an area with no Uber drivers nearby?

The latter (none available or none at all on different occasions).

[Police State]

JPJPJP said:

It is in the FT again today

https://www.ft.com/content/19c1afe8-5a8f-11e7-b553...

extract that summarises the case

1 side

The allegations in the case are small beer. Mr Maugham, a barrister at Devereux Chambers, argues that Uber was providing him with a service when he took a £6.34 ride from his office to meet a client, and is therefore obliged to provide him with a VAT receipt.

If Uber was deemed to be a service provider, it would theoretically have to collect VAT of 20 per cent of every fare and give it to HM Revenue & Customs.

and the other

Uber says it has no obligation to collect VAT or provide a receipt. It argues that it is only acting as an agent for self-employed drivers, rather than a service provider.

A spokesman for Uber said: “Drivers who use our app provide transportation services to passengers and will be registered for VAT if they meet the threshold set by government.” The VAT threshold is £85,000, an income most Uber drivers are unlikely to cross.

“This has been the case across the taxi and private hire industry for decades. Black cab drivers, and the apps they use, operate in exactly the same way. This claim is fundamentally flawed on a number of levels,” Uber added.

“This has been the case across the taxi and private hire industry for decades. Black cab drivers, and the apps they use, operate in exactly the same way. This claim is fundamentally flawed on a number of levels,” Uber added.

Well, there's a blatant lie right there. No surprises though; it's a toe-rag outfit if ever there was one.

[Alpinestars]

hunton69 said:

A private hire operator who accepts a job from a customer and takes payment via a credit card only pays Vat on the profit of the job as the operator acts as a broker.
As an example the job is £10 and the driver gets paid £8 the profit is £2 therefore the Vat liability is £0.40


Uber appears to get away without paying Vat as the transaction is made overseas.

Because it is overseas or because it says it's an agent and not principal?