UK Supreme Court Rejects Uber Appeal, Spares Rival Taxi Firms from VAT Burden

Uber had sought to impose a uniform tax obligation on competitors by arguing that private-hire operators should be seen as entering into direct contracts with passengers—similar to the arrangement applied to Uber under a 2021 Supreme Court decision. That landmark ruling determined that Uber drivers are “workers” entitled to basic employment rights and that Uber must charge 20% value-added tax (VAT) on rides.

Following that decision, Uber petitioned the courts to extend the same VAT responsibilities to other operators outside of London, where regulatory oversight differs. The High Court had initially sided with Uber, but that decision was overturned in July 2024 by the Court of Appeal after a legal challenge mounted by Delta Taxis and ride-hailing platform Veezu, per Reuters.

On Tuesday, the Supreme Court upheld the Court of Appeal’s judgment, effectively ruling that private hire operators outside London are not legally required to enter into contracts with passengers—and therefore not liable for VAT on the full fare as Uber is.

“This confirms that different contractual protections apply for people booking trips in London compared to the rest of England and Wales,” an Uber spokesperson said, while also emphasizing that the decision “has no impact on Uber’s application of VAT.”

Read more: Hong Kong Plans to Regulate Ride-Sharing Services Like Uber

The verdict has been welcomed by smaller operators who argued that aligning them with Uber’s VAT model would have drastically increased costs for customers. Layla Barke Jones, legal representative for Delta Taxis, stated the ruling had “averted a crisis” for many regional firms.

Veezu echoed that sentiment, with Chief Legal Officer Nia Cooper describing the decision as “a triumph for the UK private hire sector,” helping avoid the kind of fare hikes that could have arisen under the proposed tax structure.

Meanwhile, in a separate but related legal development, Estonian ride-hailing service Bolt recently prevailed in a VAT dispute with HM Revenue & Customs (HMRC). The company successfully argued that it should only be liable for VAT on its commission margin, not the full ride cost. However, Reuters reported that HMRC has been granted permission to appeal that ruling at the Court of Appeal.

Bolt UK’s senior general manager Kimberly Hurd welcomed the Supreme Court’s stance in the Uber case but noted that the inconsistent legal framework across the country underscores the need for comprehensive reform in the sector.

Source: Reuters