Uber Locked in £1 Billion VAT Dispute with HMRC
Uber is locked in a high-stakes dispute with HM Revenue & Customs (HMRC) over a £1 billion VAT payment. The ride-hailing giant argues that it should only pay VAT on its profits, not its revenues, invoking the Tour Operators' Margin Scheme (TOMS).
Uber's UK accounts show a profit of £29 million on £5.3 billion in revenues last year. Despite the relatively small margin, Uber has paid a significant amount in VAT to HMRC. Since March 2022, Uber has remitted £951 million in VAT, including £631 million in 2023 alone. This year, Uber paid £150 million in VAT in January and recently received a £170 million bill.
Uber's stance is that VAT should be applied only to its profits, not its entire revenues. The company believes this is in line with the TOMS, which allows businesses to pay VAT on the margin they make on sales, rather than the full value of those sales. Uber's argument is that it acts as a middleman, facilitating journeys but not providing the actual transport service.
Uber's revenues increased by 56% in 2023, partly due to a business restructuring in 2022. Despite the growth, the company maintains that it should not be taxed on its entire turnover. The dispute with HMRC remains unresolved, with Uber considering the £1 billion VAT payment as a debt to be recovered.
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