5 ms·

Uber is being sued for hundred of millions dollars for allegedly avoiding UK VAT

91 points by bartkappenburg 10y ago

CarolineW 10y ago
Click-bait. It's not the ride that might cost Uber the money, it's the case that claims they are not paying the tax they should. The fact that the lawyer used Uber to take the ride to deliver the paperwork is ironic at best, more likely it's just irrelevant and used as, well, click-bait. Maybe that's what's needed to get people to spend their limited attention on something.
- bartkappenburg 10y ago
  Changed the title to better reflect the article
  - ascorbic 10y ago
    It doesn't reflect the article now. The previous title was accurate. Uber isn't being sued for hundreds of millions of dollars. It's being sued for a single VAT receipt on a $12 ride. It's the precedent that would cost them hundreds of millions, but that would need another case.
- ascorbic 10y ago
  The single ride they're referring to isn't the one to deliver the paperwork, it's the one which Jo Maugham is suing to get a VAT receipt for.
  - mpeg 10y ago
    It's still very clickbait-y, especially as that guy is basically just trying to get PR for his firm so he can crowdfund the money needed to sue Uber (campaign is looking very sad at the moment with £4k out of £75k raised on day 3) and a warning that he will need to raise even more money if the case is to go through.
ziszis 10y ago
AirBnb charges and pays VAT in the UK and EU [1]. EBay charges and pays VAT in the UK and EU [2]. I understand that companies want to avoid paying taxes, but I wonder what the legal reasoning was that led Uber to decide not to. Uber needs to pick its battles better. [1] https://www.airbnb.com/help/article/436/what-is-vat-and-how-does-it-apply-to-me https://www.airbnb.com/help/article/436/what-is-vat-and-how-... [2] http://sellercentre.ebay.co.uk/business/about-vat http://sellercentre.ebay.co.uk/business/about-vat
- azneo 10y ago
  Amazon, too, pays VAT in the UK.
  - dopamean 10y ago
    Amazon pay VAT in the UK or they need to pick their battles better?
    - azneo 10y ago
      Oh sorry. Amazon pays VAT in the UK. Will fix comment.
  - deleted 10y ago
    [deleted]
- dalore 10y ago
  Uber is arguing that they aren't taking the money, but the driver is. And so the driver pays the vat. Uber would have to pay VAT on the part they take from the driver though. Uber take what 30%? So if you had a £100 ride, the driver takes up £70. The driver will be under the VAT threshold and so doesn't have to charge VAT. However, Uber's £30 they took from the driver should have VAT. I've heard from drivers that Uber adds lots of fees so I wouldn't be surprised if they actually took £36 from the driver and charged him £6 VAT. That VAT would go the UK government, but it would be offset by any expenses Uber incurs with VAT. The UK want Uber to add the VAT before it goes to the driver. So the £100 ride would cost £120. Of which £20 would go the government, and the driver not pay anything (as he is an employee). So not only are they trying to avoid paying less VAT but they are trying to avoid passing on the VAT to customer, making their prices seem cheaper when compared to people that do charge VAT. But a black cab wouldn't normally charge VAT either, since they are self employeed and would be under the threshold.
StClaire 10y ago
I respected Uber when they started for pushing against bs regulations like, "you're drivers need to belong to a taxi union," or "stay away from airports." But why screw with taxes? They won't win that fight. Why not just pay California a little bit of money to legally run their self driving cars? It'll cost them more in salaries to have a meeting about the issue than to pay it. And why not just deal with sexual harassment in the workplace? It's the right thing to do
- TAForObvReasons 10y ago
  What's the difference between the "bs regulations" like the "taxi union" and other regulations like tax? I'm not saying one is better than the other, but it's hard to appeal to the idea of "BS regulations" without admitting the possibility that VAT is BS.
  - TeMPOraL 10y ago
    Or, conversely, that maybe "taxi union" regulations are not BS. Either way, arbitrarily ignoring laws is not how one should run business in a civilized society.
  - JumpCrisscross 10y ago
    Popular opinion. Uber are a populist company, political entrepreneurs as much as economic ones. People will call their representatives and show up for events to fight the taxi unions [1]. Few will do the same for tax dodgers. [1] https://www.washingtonpost.com/opinions/ubers-bare-knuckle-battle-against-the-taxi-industry/2015/07/27/e0e7be98-3483-11e5-8e66-07b4603ec92a_story.html https://www.washingtonpost.com/opinions/ubers-bare-knuckle-b...
  - xixi77 10y ago
    Regardless of the merits of the suit, taxes are not regulations in the same way taxi union rules are: they are a way to provide the government with revenue. People may disagree about whether government should involve itself in the taxi business, but as long as we have one, we need a way to fund it somehow.
deleted 10y ago
[deleted]
alistproducer2 10y ago
The knives are definitely out now. The common theme is that almost all of these monumental blunders have to have been known and approved at the highest levels. I'm curious, what kind of leverage do VCs have on pushing for leadership change?
- jgalt212 10y ago
  Please, the VCs are complicit in all this.

Click-bait. It's not the ride that might cost Uber the money, it's the case that claims they are not paying the tax they should. The fact that the lawyer used Uber to take the ride to deliver the paperwork is ironic at best, more likely it's just irrelevant and used as, well, click-bait. Maybe that's what's needed to get people to spend their limited attention on something.

bartkappenburg 10y ago
Changed the title to better reflect the article
- ascorbic 10y ago
  It doesn't reflect the article now. The previous title was accurate. Uber isn't being sued for hundreds of millions of dollars. It's being sued for a single VAT receipt on a $12 ride. It's the precedent that would cost them hundreds of millions, but that would need another case.
ascorbic 10y ago
The single ride they're referring to isn't the one to deliver the paperwork, it's the one which Jo Maugham is suing to get a VAT receipt for.
- mpeg 10y ago
  It's still very clickbait-y, especially as that guy is basically just trying to get PR for his firm so he can crowdfund the money needed to sue Uber (campaign is looking very sad at the moment with £4k out of £75k raised on day 3) and a warning that he will need to raise even more money if the case is to go through.

ziszis 10y ago

AirBnb charges and pays VAT in the UK and EU [1]. EBay charges and pays VAT in the UK and EU [2]. I understand that companies want to avoid paying taxes, but I wonder what the legal reasoning was that led Uber to decide not to. Uber needs to pick its battles better. [1] https://www.airbnb.com/help/article/436/what-is-vat-and-how-does-it-apply-to-me https://www.airbnb.com/help/article/436/what-is-vat-and-how-... [2] http://sellercentre.ebay.co.uk/business/about-vat http://sellercentre.ebay.co.uk/business/about-vat

azneo 10y ago
Amazon, too, pays VAT in the UK.
- dopamean 10y ago
  Amazon pay VAT in the UK or they need to pick their battles better?
  - azneo 10y ago
    Oh sorry. Amazon pays VAT in the UK. Will fix comment.
- deleted 10y ago
  [deleted]
dalore 10y ago
Uber is arguing that they aren't taking the money, but the driver is. And so the driver pays the vat. Uber would have to pay VAT on the part they take from the driver though. Uber take what 30%? So if you had a £100 ride, the driver takes up £70. The driver will be under the VAT threshold and so doesn't have to charge VAT. However, Uber's £30 they took from the driver should have VAT. I've heard from drivers that Uber adds lots of fees so I wouldn't be surprised if they actually took £36 from the driver and charged him £6 VAT. That VAT would go the UK government, but it would be offset by any expenses Uber incurs with VAT. The UK want Uber to add the VAT before it goes to the driver. So the £100 ride would cost £120. Of which £20 would go the government, and the driver not pay anything (as he is an employee). So not only are they trying to avoid paying less VAT but they are trying to avoid passing on the VAT to customer, making their prices seem cheaper when compared to people that do charge VAT. But a black cab wouldn't normally charge VAT either, since they are self employeed and would be under the threshold.

StClaire 10y ago

I respected Uber when they started for pushing against bs regulations like, "you're drivers need to belong to a taxi union," or "stay away from airports." But why screw with taxes? They won't win that fight. Why not just pay California a little bit of money to legally run their self driving cars? It'll cost them more in salaries to have a meeting about the issue than to pay it. And why not just deal with sexual harassment in the workplace? It's the right thing to do

TAForObvReasons 10y ago
What's the difference between the "bs regulations" like the "taxi union" and other regulations like tax? I'm not saying one is better than the other, but it's hard to appeal to the idea of "BS regulations" without admitting the possibility that VAT is BS.
- TeMPOraL 10y ago
  Or, conversely, that maybe "taxi union" regulations are not BS. Either way, arbitrarily ignoring laws is not how one should run business in a civilized society.
- JumpCrisscross 10y ago
  Popular opinion. Uber are a populist company, political entrepreneurs as much as economic ones. People will call their representatives and show up for events to fight the taxi unions [1]. Few will do the same for tax dodgers. [1] https://www.washingtonpost.com/opinions/ubers-bare-knuckle-battle-against-the-taxi-industry/2015/07/27/e0e7be98-3483-11e5-8e66-07b4603ec92a_story.html https://www.washingtonpost.com/opinions/ubers-bare-knuckle-b...
- xixi77 10y ago
  Regardless of the merits of the suit, taxes are not regulations in the same way taxi union rules are: they are a way to provide the government with revenue. People may disagree about whether government should involve itself in the taxi business, but as long as we have one, we need a way to fund it somehow.

deleted 10y ago

[deleted]

alistproducer2 10y ago

The knives are definitely out now. The common theme is that almost all of these monumental blunders have to have been known and approved at the highest levels. I'm curious, what kind of leverage do VCs have on pushing for leadership change?

jgalt212 10y ago
Please, the VCs are complicit in all this.