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Comment by sparkling | Hacker News Reader

From the Thread:

>Until last year, Uber said this meant it didn't have to charge VAT. It was just the agent for its drivers. So - the argument went - don't look at Uber's £2.5bn of revenue... look at each driver's own small revenue. Too low for VAT.

Doesn't this come down to what entity actually issued the invoice? When a UK customer gets the invoice for a ride, is it issued by Uber or by the individual driver/transport company?

Not sure about the UK, but in most jurisdictions they operate the invoice is coming from the driver/transport company, not Uber. My understanding is that any fees or comission that Uber collects are handled in the background between Uber and the driver/transport company.

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> Doesn't this come down to what entity actually issued the invoice?

The way a value added tax works is the company that issues the invoice owes tax on its own markup.

In normal circumstances, this means the company that issues the invoice charges 20% on the full amount of the product, and their suppliers charge 20% on their invoices, with the first company paying the VAT on those invoices to their suppliers and the difference to the HMRC (who also collect VAT from the suppliers)

Uber's argument was "hey, we only owe HMRC for our markup, but these drivers supplying taxi services [probably] don't earn enough to owe VAT either, so we won't add VAT to our payments to them and can lower the overall bill to our end customers.

in 2021[1] a Supreme Court ruled that their drivers are employees (and not self-employed people), so I suspect the invoice shall be coming from the company. Perhaps that's also why HMRC is pursuing the VAT for the past year or two.

[1] https://www.bbc.co.uk/news/business-56123668

The court found they were "workers" rather than employees. It's a sort of half-way status in English employment law for people who are neither employees nor self-employed. It provides some, but not all, of the rights of employment. Most relevant here, it guarantees minimum wage.

My latest invoice (03/03/23) says:

“This supply falls under the Value Added Tax (Tour Operators) Order 1987.”

And it does look like I wasn’t charged VAT.

I think that's exactly the issue. HMRC objects to them using the rules aimed at tour operators.

There was a judgement from the high court last year which said they aren't an agent. They were deemed to be the principle supplier.

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