Uber Faces £2.6 Billion in UK VAT Assessments
Key Facts
Uber said HM Revenue & Customs issued multiple assessments seeking about £2.6 billion, or $3.4 billion, in unpaid value-added tax on its UK rides. The assessments cover the period from March 2022 to December 2025, according to the company’s disclosure for the third quarter ended September 30, 2026. The dispute concerns how the company applied the Tour Operators’ Margin Scheme, known as the Value Added Tax (Tour Operators) Order 1987, to its ride services. Uber said it has already paid £1.4 billion of the amount and expects to pay the remaining £1.2 billion to pursue its appeal. It said the payments “do not represent our acceptance of the assessments,” and said it intends to defend its application of the order before the Tax Tribunal.
Uber began accounting for VAT on a margin basis in its UK business on March 14, 2022, rather than on total bookings, according to its disclosure. The dispute centers on whether this tax treatment applies to rides arranged by the company and on the amounts due for the period in which it applied the scheme. The company said it changed its UK operating model on that date, and that the assessments then covered the period through December 2025. According to the company’s account of the dispute, the assessment does not concern the classification of drivers or whether they are workers rather than independent contractors. The court ruling that came to the fore in this case also addressed the tax treatment of Bolt’s services, not the employment status of Uber drivers.
On June 12, 2026, the UK Court of Appeal upheld HMRC’s appeal in the Bolt case and overturned the decisions of the two lower courts, causing the company’s challenge to the authority’s decision to fail. The court said Bolt’s on-demand taxi services did not qualify for the Tour Operators’ Margin Scheme because they were not comparable to services provided by travel agents or tour operators. The ruling said “no one could seriously say that travel agents and tour operators provide on-demand taxi rides.” The court valued the dispute in the Bolt case at about £190 million, and was told other cases were awaiting the ruling, with amounts exceeding £1 billion. The ruling provides context for the debate over applying the scheme to transport services, but it was issued in the Bolt case.
Uber disclosed in June 2026 that it had received tax assessments of about £1.4 billion for the period from March 2022 to September 2024, and said at the time that it expected to receive additional assessments covering the period from 2023 to 2025. The total assessments the company later announced rose to about £2.6 billion, with the period covered extending through December 2025. The difference between the two disclosures reflects the addition of assessments and new periods to the claim reported in June. That does not mean Uber has accepted the amounts as valid; it said payment allows it to pursue its challenge and that it expects to recover the amounts paid, with interest, if its appeal succeeds. The company said it believes it will win the appeal, while it awaits dates for hearings before the Tax Tribunal.
Uber said unrestricted cash, cash equivalents and short-term investments totaled $10.1 billion at the end of the third quarter. It said paying the remaining balance of the assessments would reduce operating cash flow, with no impact on operating results. The company thus identifies the expected financial effect of payment as a cash movement, while classifying the amounts already paid as receivables it expects to recover if it wins its appeal. Recovery of those amounts remains contingent on the outcome of the appeal, according to the company’s disclosure. Uber did not provide hearing dates and said it is waiting for the Tax Tribunal to set them.
Uber stopped applying the Value Added Tax (Tour Operators) Order 1987 to supplies made from January 2, 2026, after a UK legislative change barred private hire vehicle operators from using it from that date. This means the announced assessments relate to a period before the legislative change took effect and end in December 2025. The company said it will defend its interpretation for the period in dispute while it awaits appeal hearings. On the business front, Uber forecast gross bookings of between $63.25 billion and $65.25 billion in the fourth quarter of 2026. It estimated this would represent annual growth of between 18% and 22% on a constant-currency basis.