UBER could starting charging passengers 20 per cent VAT

UBER could starting charging passengers 20 per cent VAT following a High Court judgment

  • Uber may introduce 20 per cent VAT charge on journeys after High Court judgement yesterday
  • It would compel Uber to start charging extra as it is a VAT-registered business
  • In separate Supreme Court decision in February the company was forced to recognise drivers as workers

Uber may introduce a 20 per cent VAT charge on journeys following a High Court judgment yesterday.

In a separate Supreme Court decision in February the app-based taxi company was forced to recognise drivers as workers rather than contractors.

Lord Justice Leggatt suggested at the ruling that the firm would have to accept a contractual obligation to its customers, rather than passengers only having a contract with their driver. 

This would compel Uber to start charging extra as it is a VAT-registered business. 

But there was no specific ruling on operators’ contractual obligation so Uber London and hire firm Free Now brought a High Court challenge.  

Uber may introduce a 20 per cent VAT charge on journeys following a High Court judgment yesterday

A decision yesterday upheld the Supreme Court ruling.

The judges, Lord Justice Males and Mr Justice Fraser, said that Uber would likely have to change its operating model.

In the ruling they added that passengers who use the apps, particularly late at night, ‘may be vulnerable’ and ‘the consequences of a driver failing to turn up may be serious’.

Concerns have recently been raised about the impact of increased Uber waiting times and reduced night tube services on women’s safety after the deaths of Sabina Nessa and Sarah Everard.

Last month Uber announced that it would increase its prices by 10 per cent in London and 25 per cent for airport journeys to Heathrow, Gatwick, Luton and Stansted in an effort to cut waiting times and cancellations.

The firm reported a 20 per cent increase in demand since coronavirus restrictions were lifted in the summer.

An Uber spokesman said that ‘every private-hire operator in London’ would be impacted by the High Court decision and should comply with the verdict ‘in full’.

They added that other companies should also ensure ‘drivers are treated fairly’.

A TfL spokesman said it ‘notes’ the judgement agreed that all operators would have to ‘take steps to ensure that they comply’ including consideration of ‘whether any changes to their way of working are required’.

Concerns have recently been raised about the impact of increased Uber waiting times and reduced night tube services on women’s safety after the deaths of Sabina Nessa and Sarah Everard (stock image)

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