Uber settles £615m backdated UK VAT bill after legal ruling
The ride-hailing app’s parent firm says it paid what was owed to HM Revenue & Customs on Halloween while its latest financial results delight investors.
James Sillars
Business reporter @SkyNewsBiz
Tuesday 1 November 2022 13:48, UK
An Uber sign is displayed inside a car in Palatine, Ill., Thursday, Feb. 10, 2022.
Why you can trust Sky News
Uber has revealed a £615m payment to the UK taxman to resolve a legal demand that the company should have charged VAT on fares.
The payment, revealed in its third quarter results, followed a High Court ruling last year that the ride-hailing app-to-delivery firm’s UK business model was unlawful.
The decision – and failure to overturn it at appeal – forced Uber to collect VAT on service fees and settle a backdated bill from HM Revenue & Customs.
The wider ruling meant that the company had to treat drivers as employees rather than contractors, placing them under the protection of minimum wage rules and giving them access to benefits such as sick and holiday pay.
Uber said on Tuesday: “On October 31, 2022, we resolved all outstanding HMRC VAT claims related to periods prior to our model change on March 14, 2022.
“We do not expect any significant impact to the income statement as we have adequate reserves recorded as of September 30, 2022, related to this resolution.
“We expect a cash outflow of approximately £615m during Q4 2022 for this resolution”.
MORE FROM BUSINESS
An illuminated BP logo at a petrol station in Chester-le-Street, Durham, Britain September 23, 2021. REUTERS/Lee Smith
BP quarterly profits come in at £7.1bn after gas prices surge – as calls for ‘bigger’ windfall tax demands made
The cost of living crisis
It is starting to become clear what tax rises will be announced in two weeks – and most Britons could be hit
Made.com has stopped taking new orders. Pic: Made's website
Made.com reveals administration looms after failure to find a buyer
Uber’s shares surged by 15% at the open on Wall Street after the company reported a 72% surge in revenue for the July-September period to $8.34bn.
It said that the post pandemic recovery in bookings was expected to continue.
Uber forecast fourth quarter operating profit above market estimates.
“With cities reopening and travel booming, consumers are shifting their budgets to services”, chief executive Dara Khosrowshahi told investors.
“We’ve seen these trends continue into the fourth quarter, with October tracking to be our best month ever for both mobility and total company gross bookings.”
