Supreme Court Rejects Uber’s Tax Appeal on Private Hire Contracts
The UK Supreme Court has ruled that private-hire taxi operators like Uber outside London do not enter into contracts with passengers. This decision spares them from paying a 20% value added tax (VAT) on their profit margins.
Uber Legal Challenge Ends in Defeat
Uber brought the case following a 2021 Supreme Court ruling that classified its drivers as workers. That judgment affected Uber’s tax responsibilities and other obligations. In response, Uber aimed to clarify that private-hire operators, like itself, form contracts with passengers.
London’s High Court agreed with Uber in 2023. This meant that all operators would have to pay VAT at 20%. However, the Court of Appeal reversed that decision in July 2024. The reversal came after legal challenges from Delta Taxis and ride-hailing platform Veezu.
On Tuesday, the Supreme Court dismissed Uber’s appeal unanimously. This outcome confirms that outside of London, private-hire operators are not liable for VAT on the full trip amount.
Wider Impact Across Ride-Hailing Sector
The decision provides clarity for many regional taxi firms. They can now continue their operations without facing extra tax burdens on their margins. This ruling also limits the scope of tax liabilities imposed on smaller platforms.
In a related case earlier this year, Bolt, an Estonian-based ride-hailing and food delivery company, also won against the UK’s tax authority, HMRC. The court ruled that Bolt should only pay VAT on its margin, not the entire trip cost.
HMRC has been allowed to challenge that decision at the Court of Appeal. If successful, it may reshape how VAT applies across the entire industry.
These rulings mark important legal milestones for the private-hire industry and will likely influence future policy debates.
with inputs from Reuters