[Australia] High Court rules that Uber pays drivers ‘wages’ and is liable for $81m payroll tax bill

In Australia, Uber has suffered a significant High Court loss which has left it liable for more than $80m in unpaid taxes, The Guardian reports.

On November 4, the court dismissed Uber’s claim that it was not liable to pay payroll tax in New South Wales after the rideshare giant argued that it does not employ drivers and claimed that money paid to its drivers was not wages under state law.

The High Court found in a six-to-one decision that Uber is liable to pay $81m for the tax years 2015 to 2020. However, the ruling is reportedly likely to leave Uber with a significant bill for subsequent years, which will take the total to more than $100m.

Uber initially succeeded in appealing against the NSW chief commissioner of state revenue’s assessment, but this ruling ends the company’s legal options.

Six of seven justices agreed to dismiss the High Court appeal, stating that Uber’s drivers were employees and the money they were paid was wages.

In the judgment, the majority said, “Uber has structured its rideshare system business so payments from riders are funnelled through it. 

“That gives Uber substantive control over the fares before they are remitted to drivers, allowing Uber to deduct its service fee, or change or cancel the fare entirely.”

Chief Justice Stephen Gageler reportedly noted that payroll tax laws had been adjusted late in the last century in multiple states to capture more revenue from contractual arrangements meant to disguise the true nature of the working relationship.

“The contractor provisions … have continued ‘always speaking in the present’ to participants in the gig economy which emerged in this century,” he wrote.

According to the NSW government, payroll tax was a key part of the state’s tax base, though only around one in 20 companies met the threshold to pay it.

Courtney Houssos - the NSW finance minister - said, “It helps fund essential services that families and households rely on. Local businesses pay their fair share. Uber should pay their fair share too.”

Source: The Guardian

(Quotes via original reporting)

In Australia, Uber has suffered a significant High Court loss which has left it liable for more than $80m in unpaid taxes, The Guardian reports.

On November 4, the court dismissed Uber’s claim that it was not liable to pay payroll tax in New South Wales after the rideshare giant argued that it does not employ drivers and claimed that money paid to its drivers was not wages under state law.

The High Court found in a six-to-one decision that Uber is liable to pay $81m for the tax years 2015 to 2020. However, the ruling is reportedly likely to leave Uber with a significant bill for subsequent years, which will take the total to more than $100m.

Uber initially succeeded in appealing against the NSW chief commissioner of state revenue’s assessment, but this ruling ends the company’s legal options.

Six of seven justices agreed to dismiss the High Court appeal, stating that Uber’s drivers were employees and the money they were paid was wages.

In the judgment, the majority said, “Uber has structured its rideshare system business so payments from riders are funnelled through it. 

“That gives Uber substantive control over the fares before they are remitted to drivers, allowing Uber to deduct its service fee, or change or cancel the fare entirely.”

Chief Justice Stephen Gageler reportedly noted that payroll tax laws had been adjusted late in the last century in multiple states to capture more revenue from contractual arrangements meant to disguise the true nature of the working relationship.

“The contractor provisions … have continued ‘always speaking in the present’ to participants in the gig economy which emerged in this century,” he wrote.

According to the NSW government, payroll tax was a key part of the state’s tax base, though only around one in 20 companies met the threshold to pay it.

Courtney Houssos - the NSW finance minister - said, “It helps fund essential services that families and households rely on. Local businesses pay their fair share. Uber should pay their fair share too.”

Source: The Guardian

(Quotes via original reporting)