Uber paid no corporation tax in 2014 by ‘exploiting loopholes’

Uber paid no corporation tax in 2014 by ‘exploiting loopholes’
Controversial US taxi firm Uber paid no corporation tax in the UK last year despite making £11 million (US$17 million) in revenue, accounts reveal.

The latest accounts for Uber show its UK arm made a total of £866,302 in profit in 2014 – £566,302 of which would be liable for tax at 21 percent.

It also deferred a payment of £22,134, which can be rolled over to next year.

However, the firm has not broken the law, as it is allowed to transfer profits to its Netherlands arm, where taxes are lower.

Critics are certain the firm has purposely exploited tax loopholes to avoid paying a single penny.

‘Uber takes advantage’ 

Commenting on these revelations, the Tax Justice Network said Uber “takes advantage” by shifting their profits around the world.

When a multinational company takes advantage of a tax loophole by shifting their profits around the world via tax havens then that gives them an unfair advantage over companies entirely based in the UK,” Tax Justice Network researcher George Turner told RT.

That is why taxi drivers in the UK are so angry at what is happening with Uber, they feel that they losing business because Uber abuses the tax system to gain an unfair advantage over them,” he added.

‘Formal complaint to govt’ 

Licensed Private Hire Car Association chief Steve Wright told RT he is “in the midst of writing a formal complaint to the government and TfL [Transport for London].”

Uber has previously been criticized for not paying its fair share of tax.

Earlier this year an alliance of more than 20,000 taxi and minicab drivers called for the government to crack down on the app’s “unfair” tax practices.

Wright accused Uber of gaining an “uncompetitive advantage” by processing London bookings through its Dutch subsidiary so it pays a lower rate of VAT on the commission it takes from fares.

Uber appears to have structured its [London] operation with the sole purpose of avoiding the application of VAT in the UK at the prevailing rate,” Wright said in a letter to HM Revenue & Customs in January.

This is despite being a UK-registered company and a Licensed London Private Hire Operator, promoting its services in the UK and carrying out journeys in the UK for UK credit and debit cardholders,” he added.

‘Compliant with all tax laws’ 

The taxi firm still insists it is compliant with tax law.

Uber complies with all applicable tax laws ... As such we are fully compliant with the tax laws of the United Kingdom and the European Union,” an Uber spokesperson said in a statement.

Corporation tax is paid on profits not revenue. Deferred tax is an accounting principle that dates back to Benjamin Disraeli to encourage investment. It’s not a loophole,” the firm told the Metro on Tuesday.

We’re a young company – only three years’ old in the UK – that’s investing heavily. We’re a significant net contributor to the local economy everywhere we go, creating new opportunities for thousands of professional drivers.

The lion’s share of every fare stays local, as it remains with the drivers who use Uber. And unlike the cash-in-hand past of this industry, we only take card payments so every fare is traceable and transparent.