APPEAL MARKED: High Court to revisit landmark Uber vs Sefton Council Case in July

The Court of Appeal has scheduled a hearing for an appeal for the significant legal dispute between Uber Britannia Ltd and Sefton Metropolitan Borough Council.

The hearing marked in for 9 or 10 July 2024, revisits the High Court's decision which supported the principle status of private hire operators holding the contract with passengers for journeys booked, as stipulated by the Local Government (Miscellaneous Provisions) Act 1976.

This appeal aims to challenge the prior ruling that found contracts for private hire and ridehail services should be directly held between operators and passengers, rather than between drivers and passengers - a principle contested by Sefton Council and other regional minicab operators.

In 2021, the ADCU defeated Uber in a similar action in the High Court under separate legislation covering only London. As a result, Uber has been forced to change its business model contract directly with passengers rather than misclassifying itself as an agent. This has helped confirm driver status as workers with statutory protections. And since Uber becomes the principal rather than the agent, it is now liable for VAT.

By incorrectly designating their drivers as principal for the last decade, no VAT had been paid on Uber services since drivers do not earn enough to meet the VAT threshold of £85,000. This changed on 31 October 2022 when Uber announced that it had reached a settlement with HMRC for back VAT payment of £615 million in unpaid tax.

In a bid to negate the affect VAT might have on the entire private hire vehicle industry, private hire operators nationwide are pushing for zero-rated VAT status to alleviate financial pressures. The Government has pledged to explore the ruling's impacts further.