Uber loses UK Supreme Court appeal over tax on rival apps

LONDON (Reuters) -Uber's rival taxi operators will not face a 20% tax charge on their profit margins outside of London after the United Kingdom's Supreme Court on Tuesday ruled that private-hire operators do not enter into a contract with passengers.

Uber had brought the case following a 2021 decision by the United Kingdom's Supreme Court that its drivers were workers, which had an impact on Uber's tax and other obligations.

The company sought a declaration that private-hire taxi operators enter into a contract with passengers and London's High Court ruled in its favour last year.

That decision meant that operators must pay value added tax (VAT) at 20%, but the ruling was reversed by the Court of Appeal in July 2024 following a challenge by private hire operators Delta Taxis and platform Veezu.

Uber brought an appeal to the Supreme Court, which on Tuesday unanimously dismissed Uber's appeal.

In a separate case, Estonian ride-hailing and food delivery startup Bolt this year defeated an appeal by Britain's tax authority HMRC about on what it has pay VAT at 20%.

HMRC has since been granted permission to challenge the ruling that Bolt is only liable for VAT on its margin, rather than the full cost of the trip, at the Court of Appeal.

(Reporting by Sam Tobin; editing by Sarah Young)