Electoral Commission sued in High Court over EU Referendum

What follows is the text of a Press Release issued last night.


The Good Law Project has initiated proceedings in the High Court to establish whether the Electoral Commission failed in its duty to uphold UK election law during the EU Referendum. The Good Law Project is asking the Court to find that the Electoral Commission was wrong to clear overspending by the official Vote Leave campaign.

The case concerns a donation of £625,000 apparently made by Vote Leave to one of its “outreach groups” in the days before the Referendum vote. If that donation was included in Vote Leave’s spending return, Vote Leave would have overspent by almost 10% and would have committed a criminal offence.

If the action succeeds the Electoral Commission will be forced to reopen its investigation. And it is very likely that either a public or private prosecution of Vote Leave will follow.

The Electoral Commission has until 13 November to respond. The Good Law Project has asked for a full hearing before the end of the calendar year.

Jo Maugham QC, Founder and Director of the Good Law Project, said:

“If our democracy is to function properly the Electoral Commission must do its job carefully and diligently. I cannot see how any public body looking at these facts and taking the law into account could conclude that Vote Leave had not overspent.”

The Claim Form filed before the High Court can be seen here and the supporting witness statement here.  The Good Law Project’s letter before action can be seen here and the Defendant’s response can be seen here.

The costs of the case are funded by an ongoing Crowd Funding campaign which has so far raised over £45,000 and can be seen here.

Something is very wrong at HMRC

Assume you are a taxpayer who has been underpaying tax for years. The law allows HMRC to collect some of that tax. But it also imposes limits on how far into the past HMRC can go. Underpayments further into the past than the law permits cannot be collected: the taxpayer will get away with having underpaid tax.

What are those time limits? Well, ignoring instances where the taxpayer has been dishonest, they are, in the case of VAT, a maximum of four years – but they may be as few as two.

The formal mechanic by which HMRC collects underpaid tax is an ‘assessment’. And because of the time limits, when HMRC discovers a potential underpayment by a taxpayer going back into the past, its practice is to raise an assessment to protect its position. That way, if the potential underpayment does turn out to be an actual underpayment the taxpayer doesn’t get away with its underpayment of tax.

Raising a protective assessment doesn’t impose any obligation on HMRC to collect the tax. Nor does it impose an obligation on the taxpayer to pay it. It’s a protective or precautionary step – simple good practice – to look after the position of taxpayers generally: your position and my position.


An Employment Tribunal has decided that Uber is supplying transportation services. The consequence of that decision is that Uber should be charging VAT to customers and paying it to HMRC. And that will be true not just now but for the whole period for which Uber has operated in the UK, a period of longer than four years. 

An Advocate General at the European Court of Justice has also said Uber is supplying transportation services. And I think those decisions are right. And I am a QC specialising in tax, so this is a view I am entitled to hold. I have also taken formal advice from another QC who specialises in VAT.

If we are right – QC, Employment Tribunal, Advocate General – Uber’s VAT liability could very easily exceed £200 million a year. 

It is, of course, possible however unlikely that we are all wrong. Uber’s appeal against the Employment Tribunal could succeed. The Court might not follow its Advocate General. QCs are not always right. 

So what should HMRC do in this situation? If you read the first part of this blog post, you won’t find that a difficult question to answer. It should raise protective assessments before the sands of time run out. So as to protect its ability to collect from Uber the VAT that the courts presently suggest Uber must pay.

If we are all wrong, HMRC can abandon those assessments. But if we are right, raising those assessments will mean that Uber does not get away with it. And you and I do not miss out on hundreds of millions of pounds of vitally needed funding for public services. 

But by failing to raise protective assessments, HMRC guarantees Uber gets away with it. Even if any remaining doubt about Uber’s VAT liability disappears, HMRC will be unable to collect those hundreds of millions of pounds.

Uber says that HMRC has not raised a protective assessment. If Uber is telling the truth – and it has made a sworn witness statement to similar effect – then HMRC’s conduct is completely inexplicable. HMRC is simply throwing away, and with no good reason, the chance to collect from Uber hundreds of millions of pounds.

I can see no good reason why HMRC should adopt this stance. None at all. It is inexplicable to me – unless HMRC’s conduct is motivated by factors otherwise than collecting the tax demanded by the law. I do not know what those factors might be. But this smells very bad.

Uber: a third front

Followers of the Uber saga will remember this post, in which I explained why I was suing Uber for a VAT invoice, a case that could well end up costing Uber over £1 billion in VAT and interest.

Especially attentive followers of the Uber saga will also remember this post in which I said I was writing to HMRC to claim the input tax that, I think, should have been on the VAT invoice.

There are, as someone who takes Ubers a lot might say, many roads home.


Last week I was speaking about Uber at a conference about tax and employment matters. And, as my fellow panellists spoke, my mind drifted (listening is not a core skill of the Bar) and I began to wonder about UberPool.

If you’re a passenger of Uber’s, UberPool is like a cross between a taxi service and a bus. You get one of their taxis – but you share it with other people going in vaguely the same direction.

The UberPool model is especially interesting to accountants and investors. Here’s Bloomberg:


So. When you take a regular Uber taxi, Uber only includes as its revenue what it says is a brokerage fee – i.e. the bit that it doesn’t pay to its workers (i.e. the drivers). But when you take an UberPool, Uber includes the whole fare as its revenue. Why might that be?

The answer seems to lie in the difference between the fare structures Uber operates for those different models. (I should note that Uber operates different UberPool models in different jurisdictions).

When you take a normal Uber taxi you pay Uber a sum calculated by its time and distance algorithm, say, 100 and it passes on to its worker 75. But when you take an UberPool, you pay Uber 70 (a fare based on historical data as to what that trip will cost) and perhaps a couple of other passengers pay Uber 70. And what Uber pays its worker doesn’t just depend on what you and the other passengers pay it. It also depends on how many passengers share that UberPool taxi. The more passengers share the UberPool the lower the percentage that Uber pays to its driver.

When it operates UberPool, Uber’s fare structure makes it look even less like a broker supplying business-to-business services to drivers and even more like a principal supplying business-to-consumer services to customers. And that’s why accounting practice, which looks to economic substance over legal form, says that when Uber operates UberPool it is really acting as a principal.

That same idea – that Uber really contracts as a principal and not a broker – lies at the heart of the Employment Tribunal case that found drivers were workers supplying their services to Uber and Uber, in turn, was supplying taxi services to passengers. And if that’s right (indeed quite possibly even if its wrong) Uber should be charging VAT and handing that VAT over to HMRC.

But the Employment Tribunal reached its decision focusing on normal Uber taxis. If accounting practice is to be believed, it would have been even easier for the Employment Tribunal to reach that conclusion focusing on UberPool.

Similarly, my VAT case against Uber focuses on a journey I took in a normal Uber taxi. My case would be even easier if I took it in an UberPool.

Anyway. Back to the conference.

‘Why not?’ I thought. And after the conference I booked an Uber, my first since the journey the subject of my High Court claim, and pressed the UberPool button.

I now have an invoice for that UberPool journey. I believe (from the heretical position of “tax expert”) that it should be a VAT invoice. And I will seek to add it to the High Court claim against Uber. And I will seek to claim it back from HMRC in my next VAT Return.