Uber Technologies Inc. said it paid £386 million ($490 million) to British tax authorities as part of a dispute over how the ride-sharing applies value-added tax to trips made in the UK.
(Bloomberg) — Uber Technologies Inc. said it paid £386 million ($490 million) to British tax authorities as part of a dispute over how the ride-sharing applies value-added tax to trips made in the UK.
HM Revenue and Customs is challenging Uber’s use of the Tour Operators Margin Scheme, which is designed to simplify tax for travel agents and lets tour operators pay VAT on profit rather than on the price of a service. The program applies to travel services which are “bought in from another person and resupplied without material alteration or further processing.”
Uber is appealing the decision but has to pay up front in order to dispute it in UK tax court, the company said on Wednesday in a regulatory filing. The payment will be returned if the appeal is successful, it said.
Read more: Uber Falls on Fears of Slower Growth After Profit Milestone
Since March 2022, Uber has been classed as an official transportation provider and therefore responsible for charging VAT on rides in the UK. In November that year, Uber paid a £615 million settlement to HMRC to resolve outstanding VAT claims relating to the period before the business model change in March.
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