Uber has announced that it will pay 615 million pounds (about 700 million dollars) to the British tax authorities for back VAT linked to a court decision that established the existence of a contractual relationship between the platform and its drivers. In December 2021, the High Court in London ruled that the vehicle platforms operating in the British capital were not, as Uber argued, mere “agents”, but had a direct contractual relationship with customers.
The decision followed a ruling by the British Supreme Court which, in February 2021, found that drivers officiating on booking platforms were indeed salaried workers and not self-employed. The High Court ruling had the effect of forcing ride-sharing apps to incorporate VAT into their fares. UK tax authorities then claimed Value Added Tax from Uber.
No “significant impact” on company accounts
Outside its third-quarter results, published on Tuesday, Uber said that an agreement between the two parties was reached on Monday, which provides for the payment of 615 million pounds to the British tax authorities, before the end of the year. The group clarified that this charge would not have a “significant impact” on its accounts “because we have sufficient reserves” related to this file, according to a press release.
Following the change in status of its drivers, Uber announced, in May 2021, an agreement in May with the British union GMB to represent its 70,000 drivers in the United Kingdom. Then the company had launched, in September of the same year, the creation of a retirement plan to which it contributes up to 3% of the drivers’ earnings, and had invited rival platforms to participate.
Source: BFM TV
