Soapy Joe tries again

But I can ask HMRC to exercise its discretion to allow me to claim the £1.06 of input tax I say I paid to Uber even without a VAT receipt. And earlier today I did. You can read my letter here HMRCInputTaxLetter.

Now, why is that important?

Well, if HMRC decides to allow my claim it will be accepting that I have paid £1.06 input tax to Uber and, implicitly, that it has to collect that £1.06 from Uber. And if that is true for my £1.06 it will also be so for every other £1.06 Uber has ever charged.

And if HMRC decides to refuse my claim I could have the opportunity to appeal against that rejection and contend that, contrary to its decision, I have paid input tax to Uber. And if I won that appeal the tribunal would be deciding that Uber has charged VAT and, implicitly, has to pay that VAT to HMRC. Along with all the other VAT Uber has charged.

And that appeal would be heard before the First-tier Tribunal (Tax Chamber). I would be the Appellant, HMRC would be the Respondent and Uber would be grumbling in the back of the room. And, unlike in the High Court, in the Tax Chamber the loser doesn’t have to pay the winners’ costs.

So, he’s willing to make us taxpayers carry the legal bill for his fantasies, is he?

52 comments on “Soapy Joe tries again

  1. One thing I find rather interesting and disturbing is the bit in the Good Law Project briefing Maugham links to, which says:

    “…we have to address the possibility of a costs liability which might top £1m even before any appeals. We hope that the judge will see the public interest in our claim but if she or he does not we may look for an alternative claimant who doesn’t have any material assets. Do let us know if you are, or know, of such a person.”

    My reading of that is: if we lose, we might have to pay £1m in costs. So we want someone who’s prepared to accept the liability for that and go bankrupt, meaning that the £1m cost never gets paid and the Treasury is out of pocket.

    I’m struggling to see the effective difference between this and VAT Missing Trader Fraud, in which you set up a trader to incur a £1m VAT liability, which never gets paid because the trader disappears leaving the Treasury out of pocket.

  2. Darling fascist bully boy,

    I am a Fame Whore so give me some more taxpayers’ money, you bastard. May the seed of your loins be fruitful in the belly of your woman,

    Joss.

  3. Do let us know if you are, or know, of such a person.

    This does look, at best, unprincipled: keen to have a pop but unwilling to accept the possible consequences.

    Could one nominate the tuberous tub? Once Jezza has been compensated for the tax-dodge libel, he ought to be the perfect candidate.

  4. For £1.06? Assuming anybody bothers to respond, then all that will happen is that HMRC will estimate a number based on an extrapolation, and raise an assessment including penalties, for the underdeclaration. The commissioners will uphold it, and the court will take it off him. None of these institutions are known for their sense of humour!

  5. If Uber charges VAT, then it is already registered for VAT, and accounts for the VAT paid in, deducts the VAT paid out, and pays the resulting VAT to HMRC – already. If Uber charges VAT without being VAT registered, then it should expect to be pounced on, but as it surely cannot operate under the VAT threshold, then I can’t see why this is not a complete hoax.

  6. > Do let us know if you are, or know, of such a person.

    It’d be more honest of them to crowdfund the legal fees. We’d find out how many people are actually willing to put their cold hard cash at stake for their principles.

  7. “how many people are actually willing to put their cold hard cash at stake for their principles.”

    If Soapy is as right as he thinks he is from his writing, you’d think he’d have the balls to do it himself instead of some broke bum to front it for him.

  8. “we may look for an alternative claimant who doesn’t have any material assets”

    Wonder what the Bar Council would think to that?

  9. Excavator Man, we did look at this when this issue came up before, but basically the position is:

    Uber says that it is not a taxi service, it is just a middleman that connects taxi businesses and customers. So when you get an Uber ride you are actually contracting with the driver. So long as the driver is under the VAT threshold, you don’t have to pay VAT.

    Uber is over the VAT threshold, so has to charge VAT, but the only thing Uber is charging is commission fees to the taxi drivers, so only Uber’s commission has VAT on it, not the full price.

    Jolyon disagrees and thinks that Uber is a giant taxi company, so should charge VAT on the full price of the ride.

  10. Pellinor

    Thank you for pointing this out. As you note, the contrast in their attitude towards tax dodgers and their own fee dodging is breathtaking.

  11. From Thomas Fuller’s link:

    “Mr Maugham, a tax specialist with a practice in Lincoln’s Inn in London, said: … ‘I grew up in New Zealand'”

    Ah, chippy colonial. Explains a lot.

  12. Richard,

    Doesn’t the claimant also have to pass the twin hurdles of proving (a) without a VAT receipt that the VAT was £1.06, and (b) that his expenditure was a valid business expense anyway? I would have thought that (b) in particular might open a can of worms and a visit from a VAT inspector carrying a tincan opener and some worming powder …

  13. @ Excavator Man
    I was advised by HM Customs and Excise, many years ago, when I pointed out that parking meters charged VAT but did not give receipts, that Customs and Excise did not require VAT receipts for trivial amounts.

  14. Excavator Man, as for “(b), that his expenditure was a valid business expense anyway”, Jolyon deliberately took an Uber car to go to a business meeting.

    His problem is “(a) without a VAT receipt that the VAT was £1.06”; unless he actually contracted with Uber, as principal, to convey him to his meeting, then his only contract is for the individual cabbie, who is under the VAT threshold, so there could not have been any VAT payable anyway.

  15. If VAT ends up being imposed as a consequence of this, everyone disgruntled should send their receipts to this jumped up cvnt and ask him to refund the cost of the VAT. I imagine some sort of related class action could be mounted to drag the fvcker into court.

  16. +1 Brave Fart. Might I just state that I am changing my business model for a proposed venture involving Soapy Jo a trio of greased-up Texas body-builders and an action man model that looks strangely like Snippa

  17. The way I’m reading this, because the Twerp’s windy about a costs outcome would hit his well lined pockets, he intends to put a ringer up for the scam. So surely, that’ll have to be the ringer’s cab fare, not the Twerp’s. The ringer can’t clain for someone else’s cab fare can he?
    So if the ringer does indeed do it. And has insufficient assets to meet the cost of the court action. how’s he going to make the submission for the refund to the VAT people? If you’re VAT registered you can make the claim. But if you’ve no funds, how can you make a claim for legit business expense? You’re not trading

  18. Why on earth would the HMRC allow him to claim input VAT from a supplier which isn’t registered for VAT? Looking at the regulation he references, 29(2) in VAT 1995:

    in relation to particular cases, a claimant shall hold, instead of the invoice specified above, such other documentary evidence of the charge to VAT as the Commissioners may direct

    He doesn’t have any “other documentary evidence of the charge to VAT” because there wasn’t such a charge!

  19. Richard: …an Action Man that looks like Murphy.

    Actionable Man in the Lord Ashcroft sense would be a compromise.

  20. “So if the ringer does indeed do it. And has insufficient assets to meet the cost of the court action. how’s he going to make the submission for the refund to the VAT people? If you’re VAT registered you can make the claim. But if you’ve no funds, how can you make a claim for legit business expense? You’re not trading”

    Good point. The ringer would have to be VAT registered and in business, but somehow have no assets that they didn’t mind losing, in order to massage JM’s ego.

  21. For somebody who actually uses the title QC, Soapy Joe seems to know little about the actual law. I’m glad to see the legal profession, like my own, is also open to idiots who know fuck-all.

  22. @ Jim
    Lots of self-employed people go bankrupt every year. I should not be surprised if Soapy Joe could find one about to apply for the protection afforded by bankruptcy to front the case in exchange for (oh, perhaps a few kind words that her/his future need not look so bleak).

  23. @Tim Newman
    Your faith in human nature may be inappropriate in this case: it may not be due to ignorance.

  24. Funny how the people who go on about ‘ethical’ this and ‘ethical’ that can come up with a wheeze like this and think it is fine; noble even.

  25. “Funny how the people who go on about ‘ethical’ this and ‘ethical’ that can come up with a wheeze like this and think it is fine; noble even.”

    Typical Leftist thinking, I am good, therefore anything I do is in the furtherance of goodness, therefore is perfectly ethical. The ends etc……..they justify murder in the furtherance of their aims, a little moral chicanery such as this is so small as to be not even register on the radar.

    I guess its the old ‘count the spoons’ shtick – the more someone goes on about how ethical they are, the more you should avoid them like the plague as they’re obviously a complete shit.

  26. I guess its the old ‘count the spoons’ shtick – the more someone goes on about how ethical they are, the more you should avoid them like the plague as they’re obviously a complete shit.

    My Dad told me he recently had a plumber come to his house to do a job who early on said “I’m as honest as the day is long.” My Dad said anyone who feels they need to give themselves a character reference probably shouldn’t be trusted.

  27. @john77
    So how does he claim a cab fare as a business expense? As a bankrupt he’s not allowed to trade as a business.

  28. His supplier is the taxi driver, not Uber. Uber is the taxi driver’s supplier (a supplier of booking and dispatch services). Any VAT dispute he has is with the taxi driver, not with Uber.

  29. “Simon’s Cabs” charge a bunch of drivers 15% commission on each fare as a booking fee (because Simon does the advertising and pays a receptionist to take bookings, ensure the cars and drivers have the correct licence, and run the diary). As long as Simon doesn’t do any driving himself, it’s not a problem if he crosses the VAT threshold, because he’s only liable for the VAT on the 15% commission he charges the drivers, all of whom will earn well below the £85k. This is the Uber position.

    But of course, Simon drives his own cab as well, so if he becomes VAT registered, he has to charge his fares VAT, making him 20% more expensive than those bastards at “ABC Cabs”. Which is why none of the small taxi companies are VAT registered at all – meaning the little companies are actually gipping HMRC even harder than Uber.

  30. If Simon had any sense, “Simon’s Cabs” would be a partnership with someone else (there has to be someone manning the phones while he’s driving), and “Simon’s cab” would be just him.

    If the partnership becomes registered, that doesn’t affect the VAT liability of the cab unless HMRC think he’s deliberately split the business – but if he pays any attention at all to what his tax advisor tells him it should be quite obvious that there are two distinct businesses here.

    At £85k turnover and a separate self-employment, of course, he should probably be incorporating.

  31. @ bis
    *About* to seek the protection of bankruptcy.but not yet had a court order.
    You can keep runniong a business until you are declared bankrupt although Plod may have words if you are deliberately seeking to cheat your creditors by ordering goods with no intention of paying for them. Jolyon clearly thinks that law doesn’t apply to him

  32. In my line of work I occasionally come across an expat who thinks they’ve discovered a great way to cheat the taxman, and spells it all out. When I point out that HMRC are probably wise to every scam an amateur can dream up and has a hundred successful prosecutions under their belt for just this sort of thing they come out with:

    “Oh, well I’ll just tell them that X isn’t mine I’m just looking after it for someone” or “I’ll say I use it only for work”.

    They obviously have no idea how HMRC works, and rather than entering into a debate their likely to get slapped with a gigantic bill which they then must prove they don’t owe.

    Jolyon is beginning to sound a lot like those guys.

  33. > because he’s only liable for the VAT on the 15% commission he charges the drivers

    Uber have a nice little wheeze to avoid paying VAT on the commission too, by charging via the Netherlands. I can see why UK-based competitors would be peeved at this. But that’s nothing to do with Joyless’s claims.

  34. Will be interesting to see what happens to the likes of Uber etc who make use of EU rules on tax and VAT once Brexit is official, unless of course they agree to allow this sort of stuff to continue in negotiation.
    You’d think spud would be all over Brexit closing these EU tax gap loopholes

  35. What an idiot. HMRC and the courts are only going to allow his claim if the Uber driver concerned was liable and registered for VAT. The idea that someone can be drawn into a liability to tax by an input VAT claim is patently absurd.

    “If HMRC..” “If I win the appeal..” The man is cleary a bunch of raisins short of the full fruitacake.

  36. France has been clamping down on Uber, to the détriment of my business. Where can I film fake uber driver sex now?

  37. This will probably be disappeared off Soapy’s site :

    “If I read this correctly, you want a court paid about £1m per hour to discuss a case worth £1.60 are you mad, bad, or just dangerous to know? This has all the marks of the green carnation club cases”

    I suspect that this would disappear

  38. He has to all intents given up his practice…. Do you pay rent at the temple? How long will his private means enable this? Given his public funded windmill project? Hypocrisy does not exist as a concept for Soapy Jo, just as for Snippa, the Future Rocco star

  39. “and Uber would be grumbling in the back of the room”

    Soapy jo loves the idea of men wanking to his voice… Images of bloke in Spain spring to mind

  40. Are barratry, champerty and maintenance still offences under English law? If so, do him.

  41. Perhaps a lawyer could enlighten me as to why the “alternative claimant” arrangement suggested by Maugham would not attract an application for security for costs, per CPR25.13(2)(f) “the claimant is acting as a nominal claimant, other than as a representative claimant under Part 19, and there is reason to believe that he will be unable to pay the defendant’s costs if ordered to do so;”

  42. @ TimN
    I do wonder whether the Twerp might be biting off more than he can chew here.. HMRC must have looked at the Uber VAT situation in considerable depth already. It’s not usually reluctant to collect tax if it can. Of course, there’s no reason not to think a bunch of bureaucrats wont be delighted to waste large amounts of money arguing it out in court. More earnings opportunities for bureaucrats. Or perhaps not. Pissed off, the same bureaucrats may just as well spend some of that time & money to give the Twerp a thorough roasting. Maybe something along the lines Grace suggests. Encouraging a court to take the view that any dummy that the Twerp sticks is acting as his agent in the matter & dumping the considerable costs on the Twerp himself. After all they do have a lot of time & money & the best legal advice on tap, if they’re in the mood.

  43. And if HMRC decides to refuse my claim I could have the opportunity to appeal against that rejection and contend that, contrary to its decision, I have paid input tax to Uber. And if I won that appeal the tribunal would be deciding that Uber has charged VAT and, implicitly, has to pay that VAT to HMRC. Along with all the other VAT Uber has charged.

    … and he is a genuine QC? I don’t know how HMRC treats VAT credit claims, but in other jurisdictions with VAT, you have to prove that you paid the VAT on an input cost in order to claim the input credit. You do that by producing an invoice that includes a tax registration number of the person who provided the goods or services, and includes a notation of the VAT paid – and you may have to produce proof that you actually paid the invoice (although that is rare).

    You don’t get to ponce in and claim the £1.06 of input tax I say I paid to Uber even without a VAT receipt. Because the chances are that he didn’t pay a penny “to UBER” – he probably paid it to the operator of the car that carried him wherever he was going, and the receipt will make that quite clear. There is no reason for the HRMC to “exercise discretion” to allow his claim – any more than anyone else making up a claim for an ITC on a VAT payment that was never made.

  44. As I have noted elsewhere/before, in London an Uber offers the same quality as a black cab but for between a third and half the price. If I take an Uber, it is not instead of a black cab, it is instead of the tube. By contrast in Hong Kong, an Uber offers me a significantly better quality journey for slightly more than a (triad owned) taxi. In both countries, the vested interests are trying to use the legal system to deny me the right to choose an alternative method of transport while claiming they are looking after my interests. Uber is being attacked by vested interests wherever it is working and like everything else they get involved in, the statists use dubious interpretations of the law and identity politics to try and deprive the consumer of choice.

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