VAT News

HMRC Opens Investigation into Uber Over £1bn Unpaid VAT

The technology giant is never far from the headlines, albeit good and bad. After surviving several scares in the UK; being 'banned' from operating in London and mass black-cab protests to name a few, but this weeks news maybe it's most damaging.

HMRC has opened an investigation into Uber over allegations it owes around £1bn in unpaid VAT. The investigations have arisen regarding Uber's claim it is exempt from paying VAT because their drivers are considered self-employed, combined with the fact their earnings fall below the £85,000 threshold. ​HMRC is now looking into the validity of these claims, and whether Uber can be instead classified as a transportation company, and should, therefore, be liable to pay the levy.

Uber, which has more than 60,000 drivers in the UK, does not pay any VAT on fares because the company says it is just a middleman between its self-employed drivers and passengers. How Uber's drivers are classified has been an on-going headache for Uber for a number of years. In 2018, the Court of Appeal agreed with an employment tribunal decision that its drivers were in fact directly employed by the firm, and therefore entitled to minimum wage, sick pay and also holiday pay.


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