Jolyon Maugham QC recently started the ‘Good Law Project’, which seeks to “use strategic legal cases both to change how the law works and to drive demand for further law change”. The first such case seeks to challenge the business model of Uber by questioning whether VAT ought to be charged by drivers. The case can be read about here and one can donate some money (it’s crowdfunded) here.
This is not the first time where there has been a third-party challenge to tax arrangements. Most famously, the National Federation of Self-Employed and Small Businesses challenged an apparent “tax amnesty” that was arrived at between the Fleet Street Casuals (casual printworkers on Fleet Street newspapers) and the then Inland Revenue. In more recent times, the tax advocacy group UK Uncut challenged an apparent “sweetheart deal” between Goldman Sachs and HMRC. In both instances the court found in favour of the revenue authority, but only after allowing the case to proceed to a full hearing.
In these cases, the challenge was by way of judicial review. What is interesting about Maugham’s case however is that it is not a judicial review. Instead, Maugham wants the “High Court to order Uber to provide him with a VAT receipt for a journey from his office to meet a client last week. He claims that the law gives him a right to a VAT receipt for that journey and that Uber cannot give him the receipt without accepting it is liable to charge VAT.”
That is an interesting approach which avoids having to demonstrate that there was some decision issued by HMRC which could be challenged by way of judicial review and further avoids issues in relation to standing. It is a development worth watching for that reason alone, but also given the significant amounts of tax that are at stake not just in the United Kingdom (20% on every ride), but across the EU (as VAT is levied in each Member State) and in the many other countries around the world where a value added tax is levied on the supply of services.