Gett, the Uber rival that lets users hail down a Black Cab, is locked in a dispute with HMRC over unpaid VAT.
It comes as the Government mulls new measures to boost tax revenues from ride-hailing companies and the sharing economy.
Gett, the Israeli company, which is part owned by Volkswagen, lets users or corporate customers book a taxi through its ride-hailing app. Unlike Uber, it also works with London’s Black Cabs.
But according to accounts filed to Companies House, Gett has been hit by an HMRC investigation into £5m of business-to-business VAT receipts.
Gett said HMRC “deems the group to be the principal rather than the agent”, meaning it must charge the full amount of VAT on its ride-hailing fees. The claim only refers to its business customers. Gett has previously said it already charges VAT on its consumer ride fares. Its accounts showed it had £37m of revenues in 2019 in the UK.
The company said in its accounts that it “maintains its position as an agent and in line with agency rules has only been charging VAT on part of the ride, i.e. the profit the group makes”. A Gett spokesman declined to comment further.
The HMRC probe comes amid a major inquiry into the UK accounts of Uber worth more than £1bn. Uber does not charge VAT on its rides as it says it acts as a middleman. If it is made to, the fee could end up being passed on to consumers.
In December, the Government confirmed it was reviewing how companies in the sharing economy charged and paid VAT amid concerns it was losing billions of pounds in receipts.
Uber drivers and Airbnb landlords are typically classed as self-employed, as they do not reach the £85,000 threshold for paying VAT. If the companies were classed as the entity supplying the service, the 20pc tax would apply and potentially earn billions of pounds for the exchequer.
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