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Oh for fuck’s sake

Uber, the ride-hailing and food-delivery giant, is heading for a £1 billion-plus tax showdown with HM Revenue & Customs over VAT payments.

The Silicon Valley tech firm has, since March 2022, been required by the taxman to pay 20 per cent VAT on its fares and delivery sales.

But Uber, which posted a £5.3 billion turnover in the UK last year, believes VAT should only apply to its profits, rather than revenues.

Bollocks, you idiot, idiot, boy.

Uber is arguing that VAT should apply to gross margin – revenue minus the cost of sales which goes to the driver – not on profit. Sometimes called “gross profit” which is still something very different from profit. And yes, he really does mean profit:

Uber’s accounts show that it made a profit of £29 million on £5.3 billion of revenues last year, and paid corporation tax of £4.5 million.

Sure, OK, this is the sort of ignorance we’d expect in the opinion columns of The Guardian but the business pages of the Sunday Times?


26 thoughts on “Oh for fuck’s sake”

  1. It’s still a pretty unique view of what is, indeed, a turnover tax. Every other (VAT-registered) business in the country has to charge VAT on its sales to customers, and pass that on to the tax authorities, minus any VAT paid to its suppliers. Whether the business makes any kind of margin at all is totally irrelevant.

    Why Uber should get special treatment is anything but clear. It would be like me saying I only need to pay income tax on my savings.

  2. The Meissen Bison

    BiG – Think of Uber acting as a broker between the driver and his fare. The value added is represented by the brokerage fee.

  3. There’s no VAT on transport generally, not on trains tickets, nor bus tickets or traditional taxi fares.
    If I’ve understood right Uber are arguing that the service they sell to their self-employed drivers (workers, not sure of the definition, but they’re not employees) should be VATable.
    Jolyolyon seems to have argued that the base taxi fare should be VATable.
    Jolyolyon is a collectivist, so no further analysis needed

  4. “Think of Uber acting as a broker between the driver and his fare. The value added is represented by the brokerage fee.”

    As is the case with auctioneers. Their commission is vatable, the hammer price isn’t, unless the vendor is vat registered themselves.

  5. OT but clearly worth highlighting. How you are gaslighted & “Oh for fuck’s sake”
    National Rally, now Marine Le Pen’s electoral vehicle, but also the latest, less extreme incarnation of the Right-wing movement founded by her Holocaust-denying father, Jean-Marie Le Pen. After a lifelong march through the institutions, she is ready not only to conquer but to consolidate her victory.
    Presumably cribbed from Gramci? France is no different from the UK. The long march through the French institutions has been conducted by the socialist Left & is entirely captured territory. The Right would have difficulty entering it & creeping about let alone marching in it. Marine is the result of the French’s final revulsion of what’s been imposed on them against their will. Now we’re going to see the battle play out between democratically elected politicians & those institutions. I really don’t favour her chances of winning. The Left would rather destroy the country than surrender ground.
    And that’s the lesson for the UK. And why even the feckin Torygraph is a left dominated institution. There is no Right in the UK worth its name. Best you can manage is a very pale pink.

  6. I haven’t found The Times (which took over the Sunday Times, didn’t it?) worth reading since Bernard Levin retired.

    I’m not sure why even its personal finance section is so useless. The FT used to do a decent job on that and the Mail and Telegraph still seem to.

    My expectations for newspapers’ business coverage is low.

  7. There’s no VAT on transport generally, not on trains tickets, nor bus tickets or traditional taxi fares.
    I’m not sure about that. Willing to be corrected but isn’t private hire of a coach & driver VATable? And delivery services are, aren’t they? But then you’d get into the passengers in the cars being Uber’s clients & Uber is hiring the car & the driver’s services from the driver for carrying them. And drivers are unlikely to pass the turnover limit where they need to charge VAT.

  8. “And drivers are unlikely to pass the turnover limit where they need to charge VAT.”

    Traders who are not VAT registered cannot reclaim VAT on their inputs either.

  9. I’m sure I’ve had reciepts from taxi drivers showing VAT. Maybe I’m misunforgetting. A quick gurgle gives “The fares you charge to your passengers for taxi or private hire journeys are liable to VAT at the standard rate.” so yes, taxi fares are VAT-able sales.

    Anyway, if Uber are “just a broker”, then they are exactly the same as the century-long already existing radio control centres, where drivers “hire” a radio controller. So, if that is a VATable product, that’s where the VAT is charged. if the radio control centre pays VAT on its supplies (electricity, etc) then those input VAT costs are netted off the output VAT charges. Similarly, the VAT the driver pays on the radio hire is netted against the VAT the driver charges their customers. VAT has been in existance for 50 years, this is a solved problem.

  10. @decnine
    That’s part of the problem isn’t it? Uber will be effectively collecting VAT levied on VAT

  11. @bis,

    If she really had marched through the institutions she’d have been able to get a loan from the French banks for her perfectly legal party. Instead they built a firewall* and so she turned to Putin for a loan on commercial terms, which AFAIUI has been repaid.

    Of course everyone conveniently forgets the first part and accuse her of taking loans from Putin.

    *Apparntly the term used by the left for the instructions and centre right parties to gang up with them to keep out the “far right”.

  12. accuse her of taking loans from Putin.
    It does make it sound that Uncle Vovo took a wad of notes out his back pocket & said “Here ducks, go & overthrow Western Civilisation for me. Nah, don’t worry about that. It’s a present. Just send me a signed photo of the Arc de Triomphe when you’re in power”
    The truth being the party got a loan from a Russian commercial bank on regular terms?

  13. As Uber drivers are self-emplyed, VAT should only be on Uber’s service charge

    Times, Telegraph rapidly going downhill. Was this an AI article? Any green crap prromotiion in it?

    O/T Some informative reading for Sunday

    Includes amusing transcript from Biden senior Finance idiot :

    The Invincible Ignorance of the Western Governing Class

    By Christopher Monckton

    MMT is “Modern” “Monetary” “Theory”, which, like “Critical” “Race” “Theory”, is a non-subject manufactured by the shrieking far Left to advance its full political objectives.
    The purpose of MMT – which is not modern, is not monetary and is not a theory – is to induce the West to complete its continuing decline and eventual collapse by abandoning all monetary and fiscal discipline and bankrupt itself by overspending, over-borrowing, over-taxation and excessive money-printing


    Also worth reading

    Death by red tape

    “Soft cancellation” is the preferred tool of woke universities trying to shut down heretical speakers

    Lord David Frost: Ignore The Centrist Gloom – Go Right

    To win, the Conservatives must offer a Right-wing path to renewal

    And finally, some Humour

    Happy Sunday everyone

  14. bloke in spain sad:
    “drivers are unlikely to pass the turnover limit where they need to charge VAT”

    This is the crucial point with Uber.

    Taxi / Uber fares are subject to VAT, but an individual taxi or Uber driver is unlikely to make enough to take them over the VAT threshold, so they can stay outside VAT.

    But if you aggregate them all, Uber is way over the threshold so would have to charge VAT on everything.

    So the question is, is Uber:

    – a giant taxi company (in which case there’s VAT on all the fares), or

    – a platform that each driver advertises on, like eBay (in which case each driver is his own separate business, under the threshold, and Uber’s turnover, on which VAT is charged, is just the commission etc. it charges the drivers).

  15. @Richard T
    The interesting thing about #1 is that if Uber is a giant taxi company then all the VAT being paid by the drivers on their job related inputs are offsettable against Uber’s VAT bill*. And Oh boy! is that going to be a mountain of paperwork. And a nightmare for HMRC to keep tabs on. Each driver would have to be treated as a separate VAT collecting business despite they’re not being so. I presume that’s why there’s the turnover exemption in the first place. There’s a level below which VAT collection costs cost them more than the VAT collected.
    *Not sure of this because I’ve never had to do it. But what’s the situation with a second hand car that was bought as new privately & sold privately, and thus VAT not offset when bought, when it’s used by a business that is obliged to collect VAT? Is there anything to offset?

  16. Perhaps these vat addicted cheerleaders ought to fuck off and allow us to benefit from cheaper taxi fares. I wish these bastards would fuck off to the eu and take vat with them. Another EU imposition that governments cant let go.

  17. I agree VAT is a stupid idea that should be abolished, but we all know that isn’t happening any time soon. The question here is is Uber asking for special treatment.

    I checked my most recent Uber uses in the UK, and there is no VAT on the invoice at all. If Uber is collecting it, it does not declare this transparently to the customer – which also means as a business customer you cannot offset the VAT Uber is collecting but not telling you about. We still seem not to know if private hire rides are subject to VAT in the UK, or if most of the drivers are just not bothering to register and don’t have to because of the threshold.

    bis, HMRC already manage this for millions of VAT registered “customers”. They even have time after doing all this paperwork to come after businesses they think should be VAT registered (personal experience) but don’t, and have to be told by lawyers to fuck off.

  18. A charity that I volunteer with uses SumUp in order to take credit card payments at fundraising events. SumUp are VAT registered, we have to pay VAT on the ~2% fees that we pay them for handling credit cards (that’s the registered charity rate, the commercial rate is much higher). The charity is below the VAT threshold, so we don’t need to charge our customers VAT. Thus the end-customers don’t get a VAT receipt because they haven’t paid any VAT, even though we have.

    Uber’s customers are drivers. If they need a VAT receipt for what they pay to Uber then they will be able to get one. As a traveller, you are not Uber’s customer in exactly the way that the people who attend my charity’s events are not SumUp’s customers, and this is what this is all about.

  19. Matt, if I download Uber’s app, book using Uber, get into a car that often as not has the Uber logo prominently displayed on the side, get invoiced by Uber, the invoice has Uber’s address on it, pay the bill to Uber, will get sued by Uber if I don’t pay, etc, then I am Uber’s customer, irrespective of whatever asinine technical arguments or 4-point footnotes to buried contractual clauses Uber trys to deploy to minimise its obligations to its customers. If Uber wishes to act as an agent and use subcontractors rather than employing its own drivers and owning its own vehicle fleet, this changes nothing about the fact that the contract is between me and Uber. Exactly the same as if I book a flight with KLM and end up travelling on whichever of their partner airlines is cheapest for them to use this week.

    A big red car hire company pulls a similar stunt, and when service was once refused “You don’t have a contract with A***, you just bought a voucher from A*** financial services Ltd and we aren’t obliged to honour it, your loss, tough luck” resulted in not only a refund but the refund of difference in costs to get a car from the orange hire car company at the next desk.

  20. @BiG
    One could disagree with that. In the booking process for the car, one requests the ride & then Uber offers it out to drivers in the area. It comes back with one specific car has tendered for the job. And it’s that car one agrees to ride in. That looks very much to me as a business acting as an agent. There’s not that much difference to buying stuff on EBay. EBay may provide money collection & dispute resolution services but one’s still transacting with the seller one’s chosen, not EBay. EBay acts as an agent.

  21. The difference is that with Ebay I am buying a specific thing from a specific seller. Even At a cab rank I can get in whichever cab I choose, its common courtesy to go to the front but no obligation.

    Uber provides a generic service with no customer choice. Once a driver has accepted you have to ride or pay a cancellation cost. No choice.

    Now it may be as with Ebay that two contracts are created. But Uber cannot under any circumstances say they are not party to a contract with the rider.

  22. That’s not actually true, BiG. In the booking process the last stage is “Do you with to accept this ride?” At this point it’s a specific car identified by its proximity. Time until arrival. And one can accept or decline. You can decline & request an alternative. You can even cancel after accepting. At this point you’re aware of the matric number of the car & the name of the driver. And putting in reason for cancellation “Don’t want to use this driver” is accepted without cancellation fee. We’ve even had that accepted when the driver’s arrived at the pick up point. That implies that your agreement with the driver actually commences when you enter the car, not before. Uber just doesn’t make a point of telling you that but I suspect that’s the legal position.

  23. A lot of the cancellations I’ve made is where after the acceptance of say an 8 minute to point of pick-up has degenerated to 12 or 15 minutes & the car doesn’t seem to be moving in the right direction. Again invariably accepted without fee. The cancellation fees I have been stung for is when all’s going to schedule but the person wanting the ride has changed their mind. But the cancellation fee’s never been for the quoted aborted ride; It’s a lesser amount.

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