Uber has announced that it will pay 615 million pounds (about 715 million euros) to the UK tax authorities in relation to VAT arrears. This payment is linked to a court decision which had established that a contractual relationship existed between the platform and its drivers.
In December 2021, the High Court of London had in fact considered that the vehicle platforms operating in the British capital were not, as claimed by Uber, mere “agents” but had a direct contractual relationship with customers. The decision came after a ruling by the UK Supreme Court, which in February 2021 held that the drivers working for the booking platforms were in fact employees and not self-employed.
The High Court ruling had the effect of forcing ride-hailing apps to incorporate VAT into their rates. The UK tax authorities then claimed VAT back from Uber.
An agreement between the two parties
On the sidelines of third-quarter results published on Tuesday, Uber indicated that an agreement had been reached on Monday between the two parties, which allows for the payment of 615 million pounds to the British tax authorities before the end of the year. . The group clarified that this charge would not have a “significant impact” on its financial statements “because we have sufficient reserves” related to this file, according to a press release.
Following the change in the status of its drivers, in May 2021 Uber announced an agreement in May with the British trade union GMB to represent its 70,000 drivers in the UK. Then, in September of that year, the company had launched the creation of a pension scheme to which it contributes up to 3% of the drivers’ earnings, and had invited the rival platforms to participate.