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UK tax authorities have stopped collecting tens of millions of pounds a month with VAT payments from Uber after setting off in a related legal battle with ride-sharing app European rival Bolt.
According to footnotes in Uber’s latest quarterly financial statements, revenues and customs under His have reduced the claim that not only reduces the company’s fares, but also reduces the company’s fares, but also keeps VAT on the full cost of the ride.
Both Uber and Bolt argue that in disputes added to the financial and legal ambiguities surrounding ride-sharing in the UK, VAT should be paid only for fare reductions under the same rules that apply to tour operators.
The industry position was supported in March when a UK tax court ruled that Bolt was actually covered by a tour operator margin scheme, and upheld a decision by a lower court. The HMRC said it was disappointed with the decision and wanted permission to appeal.
HMRC has been requesting Uber payment VAT on all fares since 2022, when the UK Supreme Court ruling forced the UK to treat drivers as employees. Each quarter, after paying the amount that Uber says it owes, the agency sends a “valuation” of over £100 million to cover the differences.
Uber has previously had to pay an assessment “to move forward with the appeal process,” according to quarterly submissions. The amount of disputes paid now totals £1.4 billion. “Payment does not represent acceptance of an assessment,” he said.
However, the company’s latest filing on Wednesday revealed that tax authorities have eased their position. “HMRC has expressed its intention not to carry out an assessment awaiting a competitor’s appeal decision on the relevant issues,” Uber said.
The HMRC declined to comment on the change in attitude, citing taxpayers’ confidentiality, but said, “When appealing a decision by an unfavourable court, we will continue to take steps to protect our revenues so that we can collect taxes if successful.”
Uber declined to comment beyond the filing.
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The company generated around £5.3 billion in revenue in the UK in 2023, according to a recent release, according to around 18% of global revenue that year.
Uber began operating in the UK in 2012, three years after its founding, but faces harsh opposition from more traditional taxi drivers. It is the subject of a multi-million-pound lawsuit by a London black cab driver, claiming he has obtained a license from London’s transport.
Uber says the lawsuit is based on “completely unfounded” claims.
