Getting tax out of taxi apps?

The rise of the digital economy is changing the traditional VAT collection landscape with HMRC struggling to extricate tax as providers argue they are providing app services to third parties and many are based offshore. Sean Glancy, indirect taxes partner at UHY Hacker Young, examines the VAT issues

There are questions over Uber, the car hailing app, and their VAT position with reports of a £1bn provision for UK taxes and action by HMRC to recover the VAT considered due.

It is not known if this amount includes any provision for penalties. This article is intended to provide a view of some of the developments in the taxi electronic platform (taxi app) sector from a VAT perspective.

The market

Uber has a reputation for not accounting for VAT on its taxi activities by basing the platform in the Netherlands.

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