- Wednesday, May 01, 2024
Ride-hailing apps have to pay value added tax at 20 per cent on what they make from each trip
By: Chandrashekar Bhat
UBER on Friday (28) won a ruling from London’s High Court that other ride-hailing apps should also face a 20 per cent tax charge on their profit margins.
The company brought the case following a 2021 decision by the UK’s Supreme Court, which ruled that Uber drivers were workers, which had an impact on the company’s tax and other obligations.
In a bid to level the playing field with competitors, Uber took legal action and asked the High Court to rule that private-hire taxi operators enter into a contract with passengers.
That would mean ride-hailing apps have to pay value added tax (VAT) at 20 per cent on what they make from each trip.
Judge Alison Foster ruled on Friday that companies with a private-hire vehicle operator’s licence do enter into such a contract with their passengers.
An Uber spokesperson said in a statement that the ruling “resolves a major inconsistency in the way that rules have been applied for private hire operators across England and Wales”.
“Whilst it clarifies many key points, there remain questions on VAT and what passengers should pay,” they added.
(Reuters)
