Uber’s rival taxi operators will not have to pay 20% VAT on their profits outside London after the UK supreme court ruled that private-hire operators do not enter into a contract with passengers.
Uber had brought the case after a 2021 decision by the supreme court that its drivers were workers, which had an impact on Uber’s tax and other obligations.
The company sought a declaration that private-hire taxi operators enter into a contract with passengers and the high court in London ruled in its favour in 2023.
That decision meant that operators would have to pay VAT at 20%, but the ruling was reversed by the court of appeal in July last year after a challenge by the private hire operators Delta Taxis and the platform Veezu.
Uber appealed to the supreme court, which on Tuesday unanimously dismissed the US company’s case.
In a separate case, the Estonian ride-hailing and food delivery startup Bolt this year defeated an appeal by the UK tax authority HMRC about on what it has to pay VAT on at 20%.
HMRC has since been granted permission to challenge the ruling that Bolt is only liable for VAT on its margin, rather than the full cost of the trip, at the court of appeal.
More details soon …