UBER v SEFTON COUNCIL
Moving forward, operators should consider whether they can satisfy this obligation. To do so, they will need to be capable of clearly demonstrating upon acceptance of a booking, entrance into a clear contractual relationship with passengers to provide journeys.
A key starting point will be to review existing passenger terms and driver contracts. Ultimately, at this stage, compliance will be a subjective question
to be considered, and addressed, by each individual business.
Neil Morley is a leading lawyer in Taxi Licensing Law and has consulted on national law reforms, government briefs and High Court cases. If you want to check how you are affected by this decision, please contact Travis Morley Law on: 01159 724928 or email:
enquiries@travismorley.com
AN ACCOUNTANT’S INITIAL VIEW ON THE TAX IMPLICATIONS OF THE SEFTON CASE
Comment by Gary Jacobs CEO Eazitax
www.eazitax.co.uk
The judge’s ruling explicitly stated that the VAT consequences of changing the operating model were irrelevant to the case. (see para 85 below) This meant that the court’s decision did not hinge on potential changes to the VAT obligations of ride-sharing platforms.
This legal victory for Uber emphasises the case was primarily concerned with whether Uber and others, are indeed private hire operators, not tax implications.
Our view is that only HMRC in an individual case or national Government legislation can change the VAT environment, not regulators. So, for the time being carry on with your existing VAT model, however we suggest that everyone should have a well thought out and defendable VAT model as the private hire industry remains under scrutiny.
Further scrutiny may occur in the future, but even after The Sefton case, please do not rush to change anything. A tech company’s ride hailing platform is not the traditional private hire model. Let’s see what our government has in store for us first.
As for the ruling itself, I feel that private hire operators have always acknowledged at least a ‘duty of care’ to the passenger, so the move to principal isn’t such a big jump. However, it is an interesting use of the word ‘principal’ and could be conceived as an attempt to imply tax obligations. There were other words that could have been used such as “primary” or “main” to avoid the confusion, only time will tell.
To read Uber v Sefton Council: The Accountant’s View in full, please visit:
https://eazitax.co.uk/uber-vs-sefton-council- the-accountants-view/
PHTM AUGUST 2023
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