VAT AND PRIVATE HIRE
WHAT DOES THE BOLT SERVICES LTD VAT WIN MEAN FOR ME?
Article by Jonathan Main VAT and Indirect Taxes Partner MHA Moore and Smalley
Why should I read this?
This article deals with the latest development in the ongoing saga of VAT in the private hire market. PHTM kindly agreed to publish two previous articles by me which summarised the implications of the Uber v Sefton Council decision in July and the announce- ment of a consultation by HM Treasury (“HMT”) on the VAT treatment of private hire income in early 2024. The consultation by HMT is prompted by the VAT implications of the Sefton judgment.
This article brings us up to date with the implications of Bolt’s success at the First-tier Tribunal on the VAT treatment of its private hire revenue, which was detailed in a decision published on 15 December.
For those of you old enough to remember Soap, the iconic TV series from the late 1970’s, I hope I can live up to the opening line from each episode, “Confused? You won't be, after this week's episode of ... Soap.”
A short summary of the journey to this point
1. Uber lost its appeal to the Supreme Court on worker status (Uber v Aslam and others). The decision was released in February 2021.
2. Uber lost its appeal to the High Court on licensing requirements in London (Uber v TfL and others). The decision was released in December 2021.
3. Uber won its appeal to the High Court on licensing requirements in England and Wales (Uber Britannia Ltd v Sefton MBC and others). The decision was released in July 2023.
4. HM Treasury announced a forthcoming consult- ation on the impacts of the July 2023 High Court ruling in Uber v Sefton. This announcement was part of the Autumn Statement in November 2023.
5. Bolt won its appeal to the First-tier Tribunal on the VAT treatment of private hire revenue. The decision was released in December 2023.
18
How does this fit together /why does it matter to me? London
The TfL case is concerned with the licensing require- ments governed by the Private Hire Vehicles (London) Act 1998 (“the 1998 Act”). The final statement in the decision published in December 2021 was as follows:
“To operate lawfully under the 1998 Act a licensed operator who accepts a booking from a passenger is required to enter as principal into a contractual obligation with the passenger to provide the journey which is the subject of the booking.”
Key points:
1. The decision only relates only to London. 2. The decision explicitly followed Uber v Aslam, taking comfort from the Supreme Court analysis of the presence or absence of the contractual relationship between Uber, the driver, and the passenger.
3. It means all licensed operators (“PHOs”) covered by the 1998 Act operate as principal with the clear implication that they are required to pay VAT on the full fare paid by the passenger.
England and Wales (apart from Plymouth)
PHOs in the rest of England and Wales were not affected by the TfL decision. They had to wait for the decision in Uber v Sefton Council in July 2023. This case is concerned with the licensing requirements governed by Part II Local Government (Miscellaneous Provisions) Act 1976 (“the 1976 Act”).
The High Court agreed with Uber’s submission in this case that “to operate lawfully under the 1976 Act a PHO who accepts a booking from a passenger is required to enter as principal into a contractual obligation with the passenger to provide the journey which is the subject of the booking.”
Key points:
1. The losing parties in this case have sought leave to appeal and an injunction against local authorities changing their licensing requirements until the case is finally resolved.
2. The judge was happy to take Uber’s request to be JANUARY 2024 PHTM
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80
