HMRC has described the £615million VAT bill handed to ride-hailing giants Uber as a ‘good result for the UK taxpayer’.
According to sources, the agreement between the two parties was made yesterday (31 October).
It was originally feared that the ride-hailing giants could be slapped with a huge VAT bill valued in excess of £1.5billion after the Supreme Court provided workers’ rights to thousands of drivers across Britain in February 2021.
In a statement, a HMRC spokesperson said: "HMRC has concluded a tax dispute with Uber concerning VAT due in the UK.
“This is a good result for the UK taxpayer and one that we would have reasonably expected to achieve in the court, fully in line with our Litigation and Settlement Strategy.
“HMRC never compromises on its view of the law in order to secure a tax agreement. We will not settle for any amount less than we would reasonably expect to obtain from going to court.”
After a lengthy legal battle, Britain’s highest Court handed victory to Uber drivers for workers’ rights back in February 2021, which included the right to earn the minimum wage and holiday pay.
The landmark gig-economy judgment put pressure on HMRC to clamp down on the private hire operator. Uber had historically passed VAT liability to individual drivers who they claimed were independent contractors, rather than workers.
In today’s Quarterly Financial Results for Q3 it was revealed that Uber would pay HMRC £615million next quarter (Q4).
The statement read: “On October 31, 2022, we resolved all outstanding HMRC VAT claims related to periods prior to our model change on March 14, 2022. We do not expect any significant impact to the income statement as we have adequate reserves recorded as of September 30, 2022, related to this resolution.
“We expect a cash outflow of approximately GBP 615 million during Q4 2022 for this resolution.”