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Uber agree to pay VAT in Egypt after long running battle with taxi drivers

18 Feb 2019

Move will give UK taxi drivers hope in their own VAT battle

Controversial ride-hailing company Uber has agreed to pay value-added tax on fares in Egypt which ends a long running battle with licensed taxi drivers.

The move will however add fuel to taxi drivers campaigning in the UK for the much maligned minicab company to pay VAT where they operate.

The head of the Egyptian Tax Authority, Abdel Azeem Hussein, added that the tax would also apply to other ride-hailing companies at a rate set at 14 percent.

According to state news agency MENA Hussein said: “Reaching an agreement and determining the tax treatment that will be applied to the company Uber and other companies operating in the same area will enhance confidence and cooperation between the authority and the tax community,”

In the UK, Uber have long maintained that it does not need to pay VAT as its drivers acts as a self-employed agent.

The current VAT threshold stands at a turnover of £83,000 each year, a total rarely achieved by its drivers.

However, after a high profile ruling and several failed court appeal driver employment status has changed to 'workers' rather than 'self-employed'.

Back in 2017 Uber confirmed that there has been dialogue with HMRC, but never a formal investigation into how the company pays its tax.

Meg Hiller, the Labour MP for South Hackney and Shoreditch said it was 'extraordinary' that Uber have not been subjected to any formal investigations.

In an article in the Financial Times, Meg Hiller went on to say "HMRC has been slow to react to new business models."

A crowd funded appeal against Uber has since been lodged by tax barrister Jolyon Maugham who has demanded Uber pay the VAT owing. 

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