Vanguard News Network
VNN Media
VNN Digital Library
VNN Reader Mail
VNN Broadcasts


Go Back   Vanguard News Network Forum > News & Discussion > Uncensored Europe + > United Kingdom
Donate Register Multimedia Blogs Search Today's Posts Mark Forums Read Login

 
Thread Display Modes Share
Old March 21st, 2017 #1
NewsFeed
News Bot
 
Post Uber is being sued for avoiding hundreds of millions worth of "value added tax" in the UK. If the court case is won, most countries where Uber operates would seek such owed taxes a

Like thousands of other Londoners, Jolyon Maugham took an Uber this morning (Mar. 20). For the service of being driven from his office to Uber’s UK headquarters, he paid £9.86 ($12). Had the driver known what the accomplished tax lawyer was about to do next, he would not have accepted the ride request. Maugham was there to hand deliver a letter that would become the first step of suing the $68-billion startup for tax avoidance.

That’s why, on what was otherwise a cold and rainy morning, Maugham was unusually upbeat. If his case succeeds, Uber would end up owing the UK government hundreds of millions of dollars. What’s more is that, given how similar tax laws exist in 160 other countries, his case could open the floodgates for similar litigation, and Uber could end up owing such large sums all across the world.

Legal hinges

Maugham alleges that Uber is avoiding paying “value added tax” (VAT), a form of sales tax paid on goods and services in the UK and other countries. Barring some exceptions, such as food and children’s clothing, a UK consumer pays about 20% tax on the cost of any item or service.

The case, which will be filed in the London high court in April, hinges on a statutory entitlement that every UK citizen has to ask for a VAT receipt. The receipt is proof that the supplier of said goods or services is paying a certain amount to the UK government.

At the heart of the matter is how to define a “service.” Uber says that its drivers are “self-employed,” which means any VAT owed should be paid by the drivers. The earnings VAT threshold in the UK is £83,000 ($100,000), which is far more than a typical taxi driver would make and thus very few, if any, are likely to pay VAT.

“Drivers who use the Uber app are subject to the same VAT laws as any other transportation provider in the UK,” a spokesperson for Uber said.

However, a 2016 case in the UK ruled that drivers using Uber’s apps are defined as workers, and thus have workers’ rights, such as a guaranteed minimum wage, holiday pay, and the right to take breaks. “Because the drivers are working for Uber,” Maugham says, “the consequences of the tribunal’s decision is that it must be Uber supplying the transportation services not the workers.”

Uber is contesting the ruling. Even if it is overturned, Maugham isn’t worried because he has other reasons to claim that Uber is providing a “service.”

“There is an added value to what Uber is doing when it connects drivers to passengers,” said Rita de la Feria, professor of tax law at the University of Leeds. “So Uber is indeed providing service, otherwise it wouldn’t exist.”

If Maugham’s challenge stands, Uber wouldn’t just owe money but it could also lose its cost advantage. The VAT it will need to pay will be about 20%. (Though Uber’s price advantage varies across the world, if other countries also succeed to add VAT on Uber, it will make a big dent.)

Retrospective pain

If Maugham wins, Uber could be liable for retrospective taxes, too. The

----- snip -----


read full article at source: http://qz.com/937255/uber-is-being-s...tax-in-the-uk/
 
Reply

Share


Thread
Display Modes


All times are GMT -5. The time now is 12:37 PM.
Page generated in 0.20936 seconds.