Sunday 19 May 2019 3:15 pm

Taxman opens investigation into claims Uber owes £1bn in unpaid VAT

HMRC has opened an investigation into Uber over allegations it owes around £1bn in unpaid VAT.

Uber claims it is exempt from paying VAT because its drivers are self-employed and their earnings fall below the £85,000 threshold. ​

However, HMRC is now looking into whether Uber is a transportation company and should therefore be liable to pay the levy.

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The question of whether its drivers should be classified as self-employed has dogged Uber for years. Last year the Court of Appeal agreed with an earlier employment tribunal decision that its drivers were directly employed by the firm and were therefore entitled to minimum wage and holiday pay.

An HMRC spokesperson said: “We do not comment on identifiable businesses.

“HMRC will always make sure that every business, no matter their size, pays all the taxes due under UK law and we don’t settle for less.

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“HMRC’s ability to assess for tax will always depend on the specific facts and circumstances of any case. This could include court decisions regarding other matters where appropriate.”

An Uber spokesperson said: “Uber fulfils and will continue to fulfil its tax obligations in the countries in which it operates.”