VAT is kinda a sales tax in Europe. It means sellers must charge 20% on top of any sale, and give it to the government. Very small companies are exempt.
Uber was arguing that they were just a platform like EBay, and that every individual driver was a small enough business that they didn't have to pay the tax. Uber paid the tax, but only on Ubers fee, not the total journey amount.
This ruling is the government deciding that the tax was due on the entire journey.
Isn't VAT supposed to be a Value Added Tax? Shouldn't the driver's expenses be deducted?
Is personal labor service really subject to VAT? That's horrifically regressive, crippling the lowest paid laborers with VAT on top of income tax, instead of taxing the profit captured by the enterprise.
Wow, well done! Great to hear there are good folk out there fighting for the integrity of our public institutions. Everyone should have to play by the rules and keeping the state accountable to that end is an important task. This is really encouraging to see!
While I don't object to the outcome here, the process to collect this VAT in my opinion was wrong.
It looks like Uber decided they'd found a loophole in the VAT law. The government reviewed it and agreed. A random third party (the goodlaw project) forced the government to reconsider and collect the tax retrospectively.
I don't want to live in a world where a random third party can 'telltale' on me to the government after I've already been given the go-ahead.
In my mind, the correct route for this should be that the third party asks the government to clarify the law, and then Uber is forced to pay VAT from that point forward.
The UK Government can't decide directly how the law is applied - that is up to the courts. Getting a decision like this is a way for laws to be clarified since it sets a precedent around how the law should be interpreted.
The "third party" here is a not-for-profit seeking to challenge injustice for the sake of the public good. HMRC failing to apply the law fairly is definitely an issue that affects the public and if it takes a third party like this to represent the people where the state has failed, more power to them!
For VAT there are time-limits for corrections. I believe it's 4 years for a mistake and 20 years where there are "deliberate inaccuracies". Both seem like very sensible timelines in relation to business risk. If you're at the edge of the law, you're going to carry a lot more risk so it might be worth following the spirit, not just the letter, of the law.
It is fair to say that this is a complex case though. It's unclear whether Uber truly is a platform or a service just as it's unclear whether its "staff" are contractors or employees. I think it's right that these definitions are grappled with by civil society. Where else should disagreements about these definitions take place if not in open court?
The process is wrong in that HRMC should be doing its job without having people pushing it to.
I however refuse to give credit to Uber for finding loopholes and trying to get some pseudo approval to use them. They know very well that they operating on the edge on the law and it might come back to bite them.
[+] [-] londons_explore|5 years ago|reply
VAT is kinda a sales tax in Europe. It means sellers must charge 20% on top of any sale, and give it to the government. Very small companies are exempt.
Uber was arguing that they were just a platform like EBay, and that every individual driver was a small enough business that they didn't have to pay the tax. Uber paid the tax, but only on Ubers fee, not the total journey amount.
This ruling is the government deciding that the tax was due on the entire journey.
[+] [-] srtjstjsj|5 years ago|reply
Is personal labor service really subject to VAT? That's horrifically regressive, crippling the lowest paid laborers with VAT on top of income tax, instead of taxing the profit captured by the enterprise.
[+] [-] benjaminjosephw|5 years ago|reply
[+] [-] londons_explore|5 years ago|reply
If so, pretty much every business in the UK could be submitting revised accounts for the last 5 years...
[+] [-] londons_explore|5 years ago|reply
It looks like Uber decided they'd found a loophole in the VAT law. The government reviewed it and agreed. A random third party (the goodlaw project) forced the government to reconsider and collect the tax retrospectively.
I don't want to live in a world where a random third party can 'telltale' on me to the government after I've already been given the go-ahead.
In my mind, the correct route for this should be that the third party asks the government to clarify the law, and then Uber is forced to pay VAT from that point forward.
[+] [-] benjaminjosephw|5 years ago|reply
The "third party" here is a not-for-profit seeking to challenge injustice for the sake of the public good. HMRC failing to apply the law fairly is definitely an issue that affects the public and if it takes a third party like this to represent the people where the state has failed, more power to them!
For VAT there are time-limits for corrections. I believe it's 4 years for a mistake and 20 years where there are "deliberate inaccuracies". Both seem like very sensible timelines in relation to business risk. If you're at the edge of the law, you're going to carry a lot more risk so it might be worth following the spirit, not just the letter, of the law.
It is fair to say that this is a complex case though. It's unclear whether Uber truly is a platform or a service just as it's unclear whether its "staff" are contractors or employees. I think it's right that these definitions are grappled with by civil society. Where else should disagreements about these definitions take place if not in open court?
[+] [-] user5994461|5 years ago|reply
I however refuse to give credit to Uber for finding loopholes and trying to get some pseudo approval to use them. They know very well that they operating on the edge on the law and it might come back to bite them.