⬛️ 𝐔𝐛𝐞𝐫 𝐠𝐞𝐭 𝐨𝐟𝐟 𝐥𝐢𝐠𝐡𝐭 𝐚𝐠𝐚𝐢𝐧, 𝐰𝐢𝐭𝐡 𝐚 £𝟔𝟏𝟓 𝐕𝐀𝐓 𝐛𝐢𝐥𝐥, 𝐢𝐧𝐬𝐭𝐞𝐚𝐝 𝐨𝐟 𝐭𝐡𝐞 𝐞𝐱𝐩𝐞𝐜𝐭𝐞𝐝 £𝟏.𝟓 𝐛𝐢𝐥𝐥𝐢𝐨𝐧.

Ride-hailing giants Uber will pay HM Revenue & Customs (HMRC) £615million in outstanding VAT payments it was confirmed today. According to sources, the agreement between the two parties was made yesterday (31 October).

Uber has revealed a £615m payment to the UK taxman to resolve a legal demand that the company should have charged VAT on fares.

The payment, revealed in its third quarter results, followed a High Court ruling last year that the ride-hailing app-to-delivery firm's UK business model was unlawful.

The decision - and failure to overturn it at appeal - forced Uber to collect VAT on service fees and settle a backdated bill from HM Revenue & Customs.

Uber said on Tuesday: "On October 31, 2022, we resolved all outstanding HMRC VAT claims related to periods prior to our model change on March 14, 2022.

"We do not expect any significant impact to the income statement as we have adequate reserves recorded as of September 30, 2022, related to this resolution.

"We expect a cash outflow of approximately £615m during Q4 2022 for this resolution".

The sum is less than the £1bn+ some estimates had suggested the bill could run to.

Nevertheless, it will be welcome as the chancellor prepares an autumn statement later this month that is tipped to raise taxes for many in a bid to help fill a big black hole in the public finances.

Uber's shares surged by 15% at the open on Wall Street after the company reported a 72% surge in revenue for the July-September period to $8.34bn.

It said that the post pandemic recovery in bookings was expected to continue.

Uber forecast fourth quarter operating profit above market estimates.

"With cities reopening and travel booming, consumers are shifting their budgets to services", chief executive Dara Khosrowshahi told investors.

"We've seen these trends continue into the fourth quarter, with October tracking to be our best month ever for both mobility and total company gross bookings."

𝐓𝐀𝐗𝐈 𝐋𝐄𝐀𝐊𝐒 𝐄𝐗𝐓𝐑𝐀 𝐁𝐈𝐓 

Barrister and Director of the Good Law Project Jolyon Maugham said:

“There are some very serious unanswered questions about why HMRC appears to have settled the dispute with Uber for such a low sum”.

He went on to say:

“More to follow on this... but these numbers don't seem right at all”.