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VAT and the Gig Economy in the UK

  • United Kingdom
  • Tax planning and consultancy


A recent Supreme Court decision that determined that Uber drivers should be treated as employees of Uber rather than self-employed could have significant consequences on the way that the gig economy is treated from a tax perspective. In particular, whether the contract with the individual is one of agency or one of employment and how the principal contracts with the consumer may have a significant impact on VAT liabilities.

It is well known that HMRC had been reviewing the VAT treatment of Uber’s services and it will be important for online operators to review their contracts and to re-evaluate the correct VAT treatment. This is because the Supreme Court has emphasised that it is important to consider the economic reality of the arrangements, not just the formal contractual position. This case therefore may have a significant impact on the VAT treatment of platform services and especially those where individuals use an app to sell goods and services to consumers.  

VAT and the “Shared Economy”

Whilst policy is not yet fully formed, it is clear that UK tax authorities are increasing their focus on the taxation of the so called “Sharing Economy” where operators of digital platforms connect businesses and individuals by looking to increase the VAT and other tax burden on those operators.    HMRC has recently issued a “call for evidence” in relation to “VAT and the Sharing Economy” where industry participants can provide their views on how they think policy should be developed in this area.

Find out more

If you would like assistance in responding to this call for evidence, then please do contact Giles Salmond or your usual Eversheds Sutherland contact.

To find out more about the Supreme Court ruling and the practical impact for employers, read our article "UK Supreme Court decides Uber taxi-drivers are workers".