Case hinges on whether Uber are a transport company or an intermediary service
Uber would owe £1billion if it was forced to pay VAT, the High Court has heard.
Jolyon Maugham, who runs a group that raises money for public interest lawsuits, says Uber should pay the 20% tax on goods and services.
Uber says it doesn’t need to because it only matches drivers and passengers.
According to LTDA magazine TAXI Maugham’s lawyer Vikram Sachdeva said at the High Court hearing that the case could leave Uber liable for an estimated annual tax bill of £200million.
The decision rests on whether Uber is a transport company, supplying rides or, as it claims, simply an intermediary service.
Maugham’s lawsuit has been crowdfunded from the taxi trade and the latest hearing was an application to cap the amount of Uber’s legal fees payable by the lawyer, if he lost the case, to £20,000. Maugham argues that he is operating in the public interest.
Just last week in Egypt the controversial ride-hailing company agreed to pay value-added tax on all fares ending a long running battle with licensed taxi drivers.
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,”