Uber is suing Sefton Council in a landmark case that could see taxi fares across the country rise by 20%.
The High Court case being brought by the ride-hailing app firm could result in all taxi and private hire firms outside London being forced to hike their prices by a fifth in order to pay VAT charges on journeys.
A ruling is expected to be handed down by the end of the year after Uber sued Sefton Council. Uber already charges VAT on its journeys as a result of a series of court cases, with this legal case it is attempting to force the same upon its competition around England and Wales.
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The case in the High Court began hearing submissions last week with all arguments concluded on Friday. The judge has reserved judgment whilst she considers those arguments that were put to her.
Currently private hire operators do not pay VAT as drivers are classed as self-employed contractors, but recent court rulings have brought this arrangement into question. In March Uber raised its fares by 20% after a High Court ruling said the company could not be viewed only as an agent but as a contractor. Other operators in London were also required to do the same.
Uber is now asking for the high court to rule that any licensed operator accepting a booking anywhere in the country to also be regarded as the principal contractor and therefore liable for VAT. If it succeeds it could mean a price rise for private hire fares across the UK.
Chester law firm Aaron & Partners are representing representing a group of Liverpool taxi firms involved in the case, including Delta Taxis.
Layla Barke-Jones, a Partner in the firm’s Dispute Resolution team, said: “We are pleased to have had the opportunity to represent the views of our clients in the High Court last week, and we hope to have done enough to protect one of the traditional models of the private hire industry.
“Whether it’s parents on the school run, the elderly accessing vital services such as shops and medical appointments, or people with disabilities travelling from A to B, private hire services are simply vital to communities up and down the country.”
She added: “If the consequences of the declaration sought by Uber do arise, as warned by Delta and others, it is likely to bring about a significant rise in fares that will hit the pockets of those who can afford it the least.
“It would also come at a time when people all over the country are already feeling the squeeze of a cost-of-living crisis, with many other basic necessities starting to become unaffordable. Simply put, the magnitude and implications of this case will be vast and wide-reaching. We eagerly await its conclusion.”
A decision from the court is expected to be handed down before the end of the year. Sefton Council said it would not comment before the judgement was handed down.
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