Uber Faces a Billion Pounds Tax Suit From Lawyer Who Took on Brexit
The lawyer who spearheaded a landmark court case, which ended with the European Union’s top court ruling that the U.K. can unilaterally reverse Brexit, appeared in court for a fresh battle, this time with Uber, according to Bloomberg.
Jolyon Maugham, who runs a group that raises money for lawsuits that promote a progressive agenda, says Uber should pay Value Added Tax, a 20 percent U.K. sales tax on most goods and services. Uber says it doesn’t need to because it’s only acting as an intermediary between drivers and riders. Uber would owe 1 billion pounds if Maugham won his case, once backdated payments are counted. His lawyer Vikram Sachdeva said at the court hearing that the case could leave Uber liable for an estimated annual tax bill of 200 million pounds.
The case centers on an Uber journey Maugham took in March 2017, which cost 6 pounds and 34 pence. He wants a court declaration that Uber should give him a VAT invoice for 1 pound and 6 pence for the journey. The invoice would allow him to reclaim the sales tax as the trip was for business purposes. “The sum at issue is obviously trivial,” Maugham said in court filings, but the underlying case is “of great public importance” because of the amount of tax that would ultimately be payable if he wins.
The case will turn on the question of whether Uber should be classed as the supplier of cab rides, or whether its drivers should be. It’s a question at the heart of the so-called “gig economy,” where technology companies have upended traditional employment models. “Anyone who gets in an Uber is affected by this case,” Sachdeva said in court.
Maugham’s lawsuit “is largely crowdfunded by the black cab taxi industry, who have a significant commercial interest in seeking to alter the competitiveness” of Uber’s services, the ride-hailing firm said in its court filings. Sachdeva said Maugham is motivated by “good governance” and “wants people who ought to pay their VAT to pay it.” Maugham is “expressly saying he’s not doing it for the purpose of the black cab industry,” Sachdeva said.
Maugham is one of the most outspoken voices against the U.K.’s looming exit from the European Union. In 2016, he ran a crowdfunding campaign for a legal challenge over Prime Minister Theresa May’s plan to start the formal process for Brexit, an Article 50 notice, without first holding a vote in Parliament. That campaign became the People’s Challenge, one of the groups supporting Gina Miller in a case that went all the way to the Supreme Court and won.
Uber says Maugham’s latest case has no merit and there’s “no need for this claim to be brought.” Uber argues that HM Revenue & Customs, the U.K. tax authority, is the appropriate agency to decide on its tax payments, not Maugham.