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An Uber-legal challenge: Jolyon Maugham QC crowdfunds more than £100,000 to launch VAT High Court case

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Devereux silk is claiming 56p

A leading tax barrister has crowdfunded over £100,000 to help him bring a 56p High Court challenge against Uber, over claims the app is undercharging value-added tax (VAT).

Jolyon Maugham QC, a tenant at London’s Devereux Chambers, first revealed plans to take on the US-based app giant in February. At the time, Maugham suggested Uber should be paying VAT on its fares at a rate of 16.67%, and in 2015 alone should have paid the UK government almost £20 million.

Now, several months on, Maugham’s CrowdJustice campaign has raised £107,650. According to legal documents filed with the High Court earlier this month, the tax silk received around 3,400 separate donations, with an average contribution of just under £32. Moreover, the papers reveal that Maugham’s campaign enjoyed a separate payment of £20,000 from an “organisation connected with the black cab trade.”

The new documents also shed light on the claim itself. Maugham — who is bringing proceedings against Uber London Limited via his non-profit organisation, Good Law Project — is arguing that it should have provided him with a VAT receipt for a short, £6.34 taxi ride he took between his chambers and a client’s office. His witness statement (embedded in full below) continues:

Immaterial complexities aside, if Uber has ‘supplied’ me with a service — as that word is used in a VAT context — then it has a statutory obligation to provide me with a VAT receipt… I believe — and as a QC specialising in tax I have some reasonable professional basis for this belief — that Uber has made a taxable supply of VAT purposes and that I have an entitlement to a VAT invoice.

Contrary to Maugham’s view, Uber — which has instructed Herbert Smith Freehills to defend the claim — maintains that it is not liable for VAT because it merely connects drivers with customers, and does not provide a transport service.

Furthermore, an update on the Good Law Project’s website states that it has received several legal letters from Uber stating it will “look to recover its costs” from Maugham if the claim fails. Stressing that this could land Maugham with a hefty bill, the statement continues:

This is no small matter: it is perfectly possible that Uber’s costs of litigating the matter will reach £1m in the High Court alone. And, absent costs protection, that burden will fall on him personally. Following that correspondence we took advice from a QC who specialises in costs. Having taken that advice we were able to issue proceedings. But we will need to resolve the costs issue early on in proceedings.

Speaking to Legal Cheek this morning, Maugham — who last year was forced to defend his working class background in the wake of pro-Brexit Twitter abuse — said:

It looks like we’re going to need to make some new and interesting law about the extent to which wealthy private litigants can drown out public interest litigation.

Read Jolyon Maugham QC’s witness statement in full below:

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28 Comments

Corbyn

This guy is an idiot. Uber have a fantastic business model and the reason they can offer their customers such cheap fares is because they don’t pay tax on such transactions. The drivers do pay tax, on every fare. Unlike black cabs and other taxi firms Uber drivers do not deal in cash and therefore declare every penny they earn. If you believe that every other cab driver does the same then you are a fool.

The tax gets paid. It is not Ubers tax to pay!

Go after the tax dodging rich bast*rds of this country who are costing us hundreds of millions each year and people will applaud you.

Then we can support Northern Ireland on ALL their future ventures.

(41)(18)

Anonymous

Could not agree more. What an idiot.

(9)(5)

M. Hodge

“The drivers do pay tax on every fare”, “The tax gets paid” – thats not the issue here, its about VAT not income tax.

“Go after the tax dodging rich bast*rds of this country who are costing us hundreds of millions each year and people will applaud you.” – What do you think he is doing? This is obviously tactical following the Uber employment case, which found that the drivers were employees, hence Uber (being VAT registered) who are providing the service must then account for a VAT receipt for that service when asked. Uber’s business model has sought to position the drivers as the service provider, which if that is the case the drivers would be accountable for the VAT (obviously if they are registered – but it is unlikely they would be). As a result, Uber have not been accounting for VAT and you cannot force HMRC to collect the VAT, however you can get a VAT receipt, or seek to as in this case. He is trying to show that Uber are getting away with millions of unpaid VAT and force HMRC’s hand to collect it.

(26)(1)

Anonymous

VAT is a tax it’s called Value Added Tax.

(8)(3)

M. Hodge

Yes but there is more than one tax. The tax refered to in the original comment was obviously referring to income tax. A taxpayer can be taxed by more than one tax, companies often pay corporation tax, VAT, etc. As stated, income tax isn’t the issue here, it’s VAT, which he claims is owed.

(9)(0)

Anonymous

You obviously have no understanding of the VAT regime.

(6)(1)

Proudboobs

Interesting redactions in paragraphs 28 and 29. Where can I get a copy of the original?

At paragraph 27, he appears to conflate Uber London Ltd (the defendant) with the global brand.

(9)(0)

Anonymous

Tbh I’m glad Uber exists because I’m sick and tired of being fleeced by the black cab cartel and the minicar rip-off merchants. I guess it’s easier to sue the competition than to innovate and put the customer first

(22)(6)

Anonymous

The problem is that most of these ‘innovative’ firms are dodging tax one way or another – this is just another example of that.

(5)(2)

Truth

Exactly….see Amazon….the only innovation they know is not paying tax to wipe out any competition… Great if you want buy cheap Chinese LED bulb…not great if you work for a UK company that’s had to close as a result.

(0)(0)

Anonymous

It looks like we’re going to need to make some new and interesting law about the extent to which wealthy private litigants can drown out public interest litigation.

Wasn’t it ever the case!

(4)(0)

Anon.

Part 36 offer at 60 pence. Job done.

(19)(1)

Anonymous

He doesn’t want the VAT element of his fare back, he wants a receipt showing that VAT was paid. Your part 36 offer is irrelevant to the case.

(5)(1)

Anonymous

Tax law. Zzzzzzzzzzzzzzzzz

(1)(3)

Anonymous

This comment was deleted because it said something nasty about Jolyob Maugham.

(5)(0)

Anonymous

“Moreover, the papers reveal that Maugham’s campaign enjoyed a separate payment of £20,000 from an “organisation connected with the black cab trade.””

Why doesn’t the black cab organisation just fund the whole thing? They instructed CC on a previous case against Uber, they clearly have money to spare for this kind of thing.

(0)(0)

Anonymous

Unlike Black cabs, Uber offer no facility for disabled people and it is unusually a VAT-free service operation – their drivers’ earnings are routinely too low to attract personal VAT.
If Uber are transport service providers (not simply IT facilitators) as Maugham seeks to establish, then they should pay the appropriate VAT. Why should a mega rich service organisation contribute zero VAT to our society?

Shed no tears for the obscenely wealthy, please. We need right now to raise all the taxes we can to offset the impoverishing effects of Brexit, and ask yourself this: why does an individual have to take this up? Is HMRC sleeping on the job, or is this evidence of a sweetheart deal that robs the Treasury and costs us all more in personal taxation?

(4)(5)

Anonymous

https://newsroom.uber.com/uk/ldnwav/

They have been offering facilities for disabled passengers for over a year. You have absolutely no idea what you are talking about.

(1)(1)

Anonymous

Thanks for the update. It was a common complaint of the black cabbies that only they had a duty to bear the cost of providing disabled facilities, so all credit to Uber for this initiative.
I have absolutely no idea what I am talking about, but it seems reasonable to contest Uber’s stance that they are NOT operating as a transport service provider, when millions of pounds of VAT revenue are at stake that could be supporting our cash-strapped public services.

(1)(1)

Scep Tick

Well done crowdfunders. You have given a very rich barrister £100,000 to pursue a case that he does not want to fund himself. But which will gain him the benefit of setting off 57p against his tax.

Geniuses.

(10)(1)

Anonymous

But, but, but… it’s again Uber! *rabble rabble rabble*

The proverbial modern Frankenstein’s monster.

(2)(0)

Anonymous

against*

(0)(0)

Anonymous

Him gaining nothing from this proves that it’s about the wider principles, doesn’t it?

(2)(0)

Anonymous

Correct me if I’m wrong, but surely his seeking a receipt for VAT purposes is a dispute between him and Uber. GLP (his company) will not have privity.

He should not therefore be able to seek cost shelter on the premise that he has crowdfunded an umbrella regardless of whether it is to shield the claim or not, and he should not seek additional protection than what that costs umbrella provides.

The corporate veil really isn’t there for abuse, even in righteous causes.

(3)(0)

Anonymous

This man is an absolute tool.

I hope he loses, that Uber get a huge costs order against him, and he is then declared bankrupt.

Adios Joly.

(7)(3)

Anonymous

If bankruptcy becomes a risk, he’s looking to switch himself out for someone else:

“We hope that the judge will see the public interest in our claim but if she or he does not we may look for an alternative claimant who doesn’t have any material assets. Do let us know at info@goodlawproject.org if you are, or know, of such a person.”
https://goodlawproject.org/uber-case-update-2/

(2)(0)

Anonymous

AKA looking for stooges to sacrifice 6 years of credit worthiness for the greater good.

(1)(0)

Anonymous

We hope that the judge will see the public interest in our claim but if she or he does not we may look for an alternative claimant who doesn’t have any material assets. Do let us know at info@goodlawproject.org if you are, or know, of such a person.

https://goodlawproject.org/uber-case-update-2/

(0)(0)

Comments are closed.