UK Court Overturns 20% Tax Charge for Uber Rival Taxi Operators

Uber’s rival taxi operators will not face a 20% tax charge on their profit margins outside of London after a court on Monday overturned a ruling that private-hire operators enter into a contract with passengers.

Initial Ruling and Its Impact:

Uber had brought the case following a 2021 decision by the United Kingdom’s Supreme Court that classified its drivers as workers, impacting Uber’s tax and other obligations.

The company sought a declaration that private-hire taxi operators enter into a contract with passengers, and London’s High Court ruled in its favor last year.

That decision meant operators would have to pay 20% value-added tax (VAT). However, the Court of Appeal reversed the ruling on Monday after a challenge by private hire operators Delta Taxis and platform Veezu.

Reaction from Delta Taxis:

Delta’s lawyer, Layla Barke-Jones, from the firm Aaron & Partners, described Monday’s ruling as “a victory for the taxi industry and all those who depend on it.”

She stated, “The collective aim for us and our client in this case has always been to protect passengers and taxi firms alike, so the news that customers outside London won’t have to have VAT forced upon them will bring a collective sigh of relief.”

An Uber spokesperson said, “We will review the court’s judgment in detail and consider our next steps.” The spokesperson added, “Operator requirements are now inconsistent between London and most of the rest of England and Wales.”

Veezu’s Position and Related Cases:

Veezu did not immediately respond to a request for comment. In a separate case, Estonian ride-hailing and food delivery startup Bolt won an appeal against Britain’s tax authority HMRC about what it has to pay VAT at 20%.

HMRC’s appeal against the ruling that Bolt is only liable for VAT on its margin, rather than the full cost of the trip, is due to be heard in November.