Rishi Sunak Lands On Golden Opportunity To Raise Billions

A total of 25 drivers were part of the case and Uber said the verdict did not apply to all of its current 60,000 drivers in Britain, including 45,000 in London, one of its most important global markets.

Rishi Sunak Lands On Golden Opportunity To Raise Billions - SurgeZirc UK
Rishi Sunak Lands On Golden Opportunity To Raise Billions / Photo credit: Getty Images

Chancellor Rishi Sunak has been advised to take note of the landmark Uber legal ruling, which offers a golden opportunity to raise billions for the Treasury, a UK-based tax consultant has clarified.

Rishi Sunak is preparing for his Spring Budget statement on Wednesday, with many expecting that he is planning to increase Corporation Tax to make up for the cost of the pandemic. The UK government spent about £300billion last year alone in an effort to protect the economy.

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And if finally, Rishi Sunak confirms the extension of the furlough scheme beyond the end of April as expected, the costs will spiral still further.

At present, Uber drivers are treated as self-employed, meaning that by law they are only afforded minimal protections, a status the Silicon Valley-based company has sought to maintain during a long-running legal tussle.

However, Britain’s Supreme Court ruled a group of Uber drivers were entitled to worker rights such as the minimum wage, a decision which has implications for millions of others in the so-called “gig economy”.

Bob Lyddon, the founder of Lyddon Consulting Services Ltd, has already floated the idea of Mr Sunak adopting a more aggressive approach to companies that have their European headquarters in Dublin and Luxembourg, but which have extensive networks of operations in the UK.

For its part, Uber has its European base in Amsterdam.

He said, “If they are workers and not self-employed, Uber must pay Employer’s National Insurance, and they must pay the people through PAYE and deduct Employee’s National Insurance and Income Tax at source. And report it and pay it over straight away under the conditions of Making Tax Digital.”

“HMRC should now go round all of the internet giants and ferret out where they are engaging their workforce on an artificial self-employed basis, and retrospectively. That will close one of the two loopholes that the internet giants use, the other one being the artificial arrangements hubbed on Ireland/Luxembourg.

“The artificial usage of self-employed status for their UK workforce may be costing the UK exchequer even more than the artificial arrangements hubbed on Ireland and Luxembourg.”

In a case led by two former Uber drivers, a London employment tribunal ruled in 2016 that they were due entitlements that also included paid holidays and rest breaks.

Announcing his verdict, Judge George Leggatt said: “The Supreme Court unanimously dismisses Uber’s appeal The legislation is intended to give certain protections to vulnerable individuals who have little or no say over their pay and working conditions.”

A total of 25 drivers were part of the case and Uber said the verdict did not apply to all of its current 60,000 drivers in Britain, including 45,000 in London, one of its most important global markets.

Northern and Eastern Europe boss Jamie Heywood said: “We respect the Court’s decision which focused on a small number of drivers who used the Uber app in 2016.

“We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see.”

Uber shares fell 3.4 percent in premarket trading following the court announcement.

It could still take a number of months for the details of the decision to be worked through at a separate employment tribunal hearing aimed at sorting through practicalities over sums owed to drivers, according to lawyers.

Law firm Leigh Day says eligible drivers may be entitled to an average of £12,000 in compensation. It represents more than 2,000 potential claimants.

Uber has faced opposition from unions and challenges to its business model in several countries as it disrupts the taxi market.

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One of the two former Uber drivers who led the British case, James Farrar, called on Prime Minister Boris Johnson’s government to do more to reform the gig economy.

“I am delighted that workers at last have some remedy because of this ruling, but the government must urgently strengthen the law so that gig workers may also have access to sick pay and protection from unfair dismissal.”

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