Soapy Joe’s latest

An Employment Tribunal has decided that Uber is supplying transportation services. The consequence of that decision is that Uber should be charging VAT to customers and paying it to HMRC. And that will be true not just now but for the whole period for which Uber has operated in the UK, a period of longer than four years.

An Advocate General at the European Court of Justice has also said Uber is supplying transportation services. And I think those decisions are right. And I am a QC specialising in tax, so this is a view I am entitled to hold. I have also taken formal advice from another QC who specialises in VAT.

Err, no, not really, it doesn’t follow. Definitions in different parts of the law are different, no?

And the VAT liability is upon the individual river at present, no? Whether they are registered etc?

There being a useful little test. There are other (and older) methods of booking a cab through a central billing operation. How do they deal with VAT?

22 comments on “Soapy Joe’s latest

  1. “Mr Maugham represented Eclipse 35, a high profile scheme which purported to finance films such as Disney’s Enchanted and Underdog.
    Such arrangements caused controversy because it enabled investors obtain large amounts of tax relief, supposedly as a reward for supporting the British film industry.
    Earlier this month the Eclipse 35 scheme was branded a cover story for tax avoidance by the Court of Appeal which had helped investors escape £117million in taxes.”

    http://www.telegraph.co.uk/news/politics/ed-miliband/11522525/Labours-non-dom-adviser-represented-celebrity-tax-dodge-film-schemes.html

    Sorry Jolyon, but you aren’t a judge so your view is bollocks until a Judge has, er, judged.

  2. Faced with Maugham and Murphy together, which one would you want to deck first?

    Tough choice as both are at the apex of cvntishness, but for me it would have to be Maugham, as the bigger hypocrite

  3. You nut Soapy first because Mr Potato Head wouldn’t be able to waddle off fast enough to escape.

  4. OK, so tax I do know something about.

    “And the VAT liability is upon the individual river at present, no? Whether they are registered etc?”

    Well not as a matter of law, no. The law just says whoever provides a service has to charge VAT (if they do it often enough to cross the registration threshold).

    The point is that you can have different definitions under different parts of the law, but you can’t have different facts. If the individual is providing the service to the passenger as an independent business from Uber, then the individual has the VAT obligation. But if the individual is acting for the company, then the company does.

    And if we establish that the individuals are not de facto employees of the company, it’s really really hard to say it’s not the company providing the service to the passenger.

    (for the record, lots of the very best tax QCs have losing records, basically because the only people who see them as cost effective are the ones doing the dodgiest tax planning. If you are doing super safe tax planning, you don’t hire the most expensive tax lawyers in the land to defend you).

  5. I am aware of one VAT issue involving pre-booked taxis – I was taking regular, long-ish taxi journeys to the airport and always paid on the day. Our cab local firm told me that if I wanted to open an account and pay monthly then that would be fine, but as it would be a business arrangement I’d have to start paying VAT

  6. I wonder if Jolyon’s whole tax saviour schtick is just got up to cover him when he advises on dodgy vehicles for millionaires and billionaires?

  7. “There are other (and older) methods of booking a cab through a central billing operation. How do they deal with VAT?”

    The answer, though it’s seven years since I was on Taxi Licensing, is that a) booking control centre services are a VATable service, b) private hire is a VATable service. The booking control centre charges VAT to its customers – the drivers. The drivers charge VAT to their customers – the passengers. There is the usual VAT merry-go-round of supplier/suppliee VAT collection and returns.

    If a driver works for a fleet, the fleet company is the VAT registeree, just as in any other employer/employee situation.

  8. @Manhattan Brit, October 28, 2017 at 5:10 pm

    OK, so tax I do know something about.

    Well not as a matter of law, no. The law just says whoever provides a service has to charge VAT (if they do it often enough to cross the registration threshold).

    My interpretation: . If above threshold:

    Uber charge VAT on the booking & payment service they provide for the “river”.

    The “river” charges VAT for the service he provides to his customer.

  9. The two and fro of this is something along the lines that Uber know the rules and ought to be able to arrange a contract that takes the passenger and journey out of Uber’s VAT remit.

    They get it wrong or some judge rewrites the way things are interpreted or the rules change.

    There is a court case which causes the likes of prawn and spud to make their keyboards sticky as they type about the trillions of pounds of tax that will arise.

    The company re-writes the way it does things – probably making everyone worse off- and the trillions of tax don’t materialise.

  10. wow what a pair of cunts. Soapy joe trying to save us from the tyranny of cheap taxis (oh the horror!) whilst defending major tax dodgers (but thats different – they are rich like him unlike us poor fuckers) and mr potatohead who honestly thinks that we need saving from the tyranny of not being like east germany and what we are crying out for is a tax regime that would make the stasi envious. Thank god they are both male (or is that unpc now?) otherwise they might get together and start breeding.

  11. And you’d think a QC would spot that the employment tribunal was looking at er…. employment issues.

    VAT tribunals look at VAT issues.

    What a pompous cunt.

  12. Manhattan Brit I am going to disagree with you here.

    In Australia for instance one can be an employee for health and safety purposes but a contractor or the employee of a thrid party.

    For industrail law purposes a contractor can be an employee while billing as a company or billing through a thrid person.

    With tax a employee can be a independent business contracted as such but taxed as a contractor or employee it depends.

    Each have a different test under law. Employee’s can be contractors for one and not the other.

  13. @Benaud

    We aren’t disagreeing – there are different tests for UK employment tax and UK VAT. But you can’t pretend they are entirely unrelated when those tests are based on the same facts.

    The VAT test under discussion is whether Uber IN SUBSTANCE provide transportation services to the passenger or not. I emphasize in substance because the legal contracts aren’t the important thing here.

    Now, the fact that the individuals are legally employees is not determinative for the VAT treatment, but: once we’ve established that the individuals are so closely associated with Uber that they are legally employees, it’s then really hard to turn round and say that Uber isn’t providing the services to the passenger.

    To put this all another way, nobody is saying that there isn’t theoretically a difference between VAT law and employment law. What’s being said is that when you look at the actual law, there probably isn’t one in this case.

    Which is why you’ve got an Advocate General (plus, if we believe Maugham, a QC with VAT expertise) saying Uber is providing transportation services.

    You can say he’s a pompous twat for taking it upon himself to police the tax system, but that doesn’t make him wrong about the technical point.

  14. Just to add one point: the employment tribunal in the Uber case made a finding of fact that “It is unreal to deny that Uber is in business as a supplier of transportation service”. This isn’t based on any particular definition in the employment code (there isn’t one), it’s simply a statement of fact that the Tribunal found to be true.

    The VAT question then is whether Uber provides VATable services, once it is accepted that it is in business as a supplier of a transportation.

  15. As far as I recall the drivers haven’t been found to be employees. There are three possible situations, self employed, workers, employees. The drivers have been found to be workers, the middle position.

  16. “As far as I recall the drivers haven’t been found to be employees. There are three possible situations, self employed, workers, employees. The drivers have been found to be workers, the middle position.”

    Not sure that is quite right – the judgement says Uber “could have devised a business model not involving them employing drivers. We only find that the model which they chose fails to achieve that aim”.

    Workers and employees aren’t mutually exclusive – all employees are workers, but not all workers are employees. I don’t think the Tribunal said the individuals were not employees (though I could be wrong), although they focused mainly on whether they were workers simply because that was the key point on the matters being claimed (e.g. minimum wage applies to all workers, not just employees). But deciding they are workers does not mean they are not employees.

    But again, techy end points of employment law don’t impact the VAT position, but the findings of fact on which those decisions were based can – that is, Uber isn’t a third party technology company providing support to thousands of small transportation companies, rather Uber is the transportation company and the drivers are not running their own business.

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