Tag Archives: VAT-supreme-court

Uber to charge VAT

By   7 December 2021
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Latest from the courts

Further to my article on the Supreme Court case, Uber went to the High Court seeking to challenge this decision, but the High Court has now upheld it.

This means it is very likely that Uber will be required to charge VAT on its supplies as the court found that taxi firms make contracts directly with their customers because Uber drivers should be treated as workers not contractors. This means that Uber make to supply of taxi services to the fare and not the individual drivers.

The High Court agreed with the Supreme Court and stated that: “… in order to operate lawfully under the Private Hire Vehicles (London) Act 1998 a licensed operator who accepts a booking from a passenger is required to enter as principal into a contractual obligation with the passenger to provide the journey which is the subject of the booking.”

A spokesperson for Uber said: “Every private hire operator in London will be impacted by this decision, and should comply with the verdict in full.”

Although not a VAT case itself, this decision is the latest in a long list of VAT agent/principal cases, the most important being:

Secret Hotels 2 Ltd

Hotels4U.com Ltd

Low Cost Holidays Ltd

Adecco

All Answers Limited

It is crucial that businesses review their position if there is any doubt at all whether agent status applies to their business model.

VAT: Day-care services by private bodies are taxable

By   22 June 2021
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Latest from the courts

Following the Supreme Court decisions in Life Services Ltd and The Learning Centre (Romford) Ltd HMRC have published guidance in Revenue & Customs Brief 9 (2021).

NB: This guidance applies to bodies in England and Wales only – Scotland and Northern Ireland have different rules.

The relevant cases concerned the VAT liability of day-care services provided by private bodies to vulnerable adults in England. They confirmed that HMRC’s interpretation of the legislation is correct; that providers of day-care must be charities, public bodies or regulated by the relevant authority (“approved, licensed, registered or exempted from registration by any Minister or other authority pursuant to a provision of a public general Act”) in order to be able to exempt these services.

The legislation is: The VAT Act 1994, Schedule 9, group 7, item 9.

It is understood that there were a significant number of claims stood behind the Supreme Court cases and these will now fail.

HMRC state that providers who have not accounted for VAT on supply of these services must do so with immediate effect.

Commentary

This is a further example of the VAT complexity in the provision of health and welfare services. It has always been an area ripe for disputes and such bodies and their advisers would be prudent to review the tax treatment of their supplies. There are usually two discrete areas of potential problems; whether services are business or non-business, and if business – do they fall within the various exemptions found at Schedule 9, group 7, items 1 to 11.