Uber puts up defence against UK VAT tax probe

Uber, the company behind the ride-hailing app, has warned that operations in the UK could be crippled if it is ruled to owe VAT

It has also been under investigation by HMRC since May, over allegations that the company owes more than £1bn in back taxes

HMRC’s investigation into Uber’s taxes is one of the most significant challenges the company faces, it said in its accounts published this week.

Barrister Jolyon Maugham has also dragged Uber to court over VAT, having attempted to bring a claim for a journey worth £6.34 and been denied a VAT receipt by the company.

Uber classifies itself as a software provider that connects drivers with passengers. If HMRC reclassifies it as a transportation provider, 20% VAT would apply to gross bookings "both retroactively and prospectively", Uber said in its accounts.

"The Uber Group believes that the position of HMRC and the regulators in similar disputes and audits is without merit and is defending itself vigorously," the filing reads.

As well as battling both Maugham’s claim and HMRC, Uber is in the middle of a long-running licencing battle with Transport for London (TfL) after it granted the business in September a licence for only two months.

Uber had been given a 15-month provisional licence last year, after TfL initially declined to grant a licence at all.

 

Originally published in Economia on 9 October 2019.