From Good Law Project Founder, Jolyon Maugham QC:
The contention that underlies my case against Uber – that it is it and not its drivers who are supplying transportation services – received a significant boost on Friday with the decision of the Employment Appeal Tribunal confirming that Uber is engaging workers and supplying transportation services. This is a powerful vindication of the decision to seek to do HMRC’s job and pursue Uber where it will not.
More difficult has been how, in practice, to advance a claim against Uber worth over £1bn in avoided VAT with a budget of a little over £100,000 in a setting where the loser is liable to the winner’s costs. My strategy to address this was two-fold.
First, I would sue Uber and ask the High Court to grant me a protective costs order so that, in the unlikely event I lost, I would not be personally bankrupted.
Second, I would seek to advance the claim in a setting where the loser is not liable to pay the winner’s costs. To this end, as I explained here, in a recent VAT return I claimed to be entitled to recover the VAT on the Uber taxi ride I took (the “Claim”). I anticipated that, if HMRC rejected the Claim, I could appeal against its rejection and my appeal would be heard in the specialist tax tribunal. Were I to lose I would not have to pay HMRC’s costs. And if I won it would be because a specialist tax tribunal had decided that Uber was charging VAT and – in such circumstances – HMRC would have no alternative but to act in the public interest and collect that VAT.
My application for a protective costs order was due to be heard on 13 November 2017. On 10 November 2017, and after some chasing, I finally received a meaningful response from HMRC to the Claim. That response is not a model of clarity but I believe – it is not possible to be certain – that it amounts to a rejection of the Claim and is a decision against which I can appeal to the tax tribunal.
A consequence of having an appealable decision in the tax tribunal is that the High Court would be unlikely to grant me a protective costs order. With that in mind, I agreed with Uber that my application for a protective costs order should be adjourned. If the tax tribunal disagrees that I have an appealable decision then I will, of course, pursue that application.
What does all of this mean? It means that I can, I believe, pursue without costs risk in the technical tax tribunal the contention that Uber is dodging VAT.
I will lodge an appeal against a rejection of the Claim to the tax tribunal in the coming week and push for the earliest possible hearing.