Thursday, October 16, 2014

Uber's tax affairs referred to HMRC after complaint from senior Labour MP Margaret Hodge

Minicab operator Uber's tax affairs have been referred to HMRC by London's taxi and minicab regulator Transport for London (TfL).


The move follows a complaint from senior Labour MP Margaret Hodge that Uber was "opting out of the UK tax regime".

London mayor and TfL chair Boris Johnson said TfL had no powers over where a company pays tax.

The app's Dutch operating firm, Uber BV, does not pay tax in the UK.

"TfL has raised this issue to the appropriate body, the HMRC, for them to consider," Mr Johnson wrote in a letter to Ms Hodge.

Ms Hodge said she was "pleased".

"I hope that HMRC will carry out a rigorous and thorough investigation to ensure that Uber is paying an appropriate level of tax in the UK, rather than constructing artificial structures to get out of paying its fair share," she said.

The referral from TfL comes as a bit of a surprise after TfL’s Garrett Emmerson recently went on record saying:

“We do not have any powers in relation to an operator’s corporate structure and how or where they pay tax.



“We are fully satisfied that based on our understanding of the relationship between passengers and Uber London, and between Uber London and Uber BV, registered in Holland, that Uber is operating lawfully under the terms of the 1998 PHV(L) Act.”

This statement was made in defiance of the fact that Uber were caught bang to rights operating from its N1 premises without a current license. When reported to TfL, they just gave Uber time to apply for and receive a licence variation before investigating. TfL's staff manual states that any operator, found to be operating from premises without a licence, should have their licence revoked immediately. This never happened in this instance. 

Within the present framework of the 1998 PHV act, if TfL suspect Uber of any wrong doing, in the way the company operates, they have the power as licensing authority to suspend their licence. But again, TfL don't seem to have the bottle, although in light of the growing number of complaints and calls for a Europe wide ban, TfL are starting to slightly change their stance of "total" support for Uber.

An Uber spokesman said it complied with all applicable tax laws and "pays taxes in all jurisdictions, such as corporate income tax, payroll tax, sales and use tax and VAT".


    Source: BBC News and MayorWatch