UK-Uber facing challenge over unpaid VAT
Last year, a UK employment tribunal ruled against Uber when it delivered the verdict that the company was employing drivers and providing transport services, as opposed to Uber's view that the drivers all operated on a self employed basis.
Whilst this decision may have substantial direct tax consequences, Uber may also have failed to pay UK VAT to HMRC which was due as a result of their taxable activity. As the supplies made by Uber drivers is now classed as taxable income for Uber, this means that the UK VAT registration threshold has been far exceeded, and UK VAT at the standard rate is outstanding on a significant amount.
UK tax barrister Jolyon Maugham, is due to bring high court action against Uber in April 2017, based on the fact that he has an entitlement to a VAT receipt, the issuance of which would provide proof that VAT was due to HMRC.
If succesful, Uber may face historic liabilities which could represent hundreds of millions of pounds.
It should be noted that Uber are currently appealing the verdict of the employment tribunal. Updates will be posted as the matter progresses.