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<\/p>\nUber will have to fork out $81 million after the High Court of Australia determined the rideshare company owed payroll tax in New South Wales.<\/p>\n
The company lodged a High Court challenge to an assessment that payroll tax be imposed on the fares given to Uber drivers between the 2015 and 2020 financial years.<\/p>\n
Uber had argued that it was merely a “payment collection agent” that gave the fare to the driver after deducting service fees, and that it should not be captured by NSW payroll tax rules.<\/p>\n
<\/p>\n
Uber had argued it provided “mere administrative payment arrangements” and should not pay payroll tax. (ABC News: Morgan Timms)<\/p>\n
But the High Court, by majority, dismissed the company’s appeal in full today.<\/p>\n
It declared that Uber’s drivers were employed under contracts and that the fares they received were deemed to be wages for the purposes of payroll tax legislation.<\/p>\n
Uber will also be required to pay the costs to the NSW Chief Commissioner of State Revenue.<\/p>\n
Decision likely to impact broader gig economy<\/p>\n
The High Court was being asked whether it should uphold a decision from last year, which declared Uber was captured in six NSW payroll tax assessments.<\/p>\n
The rideshare company was first handed the $81 million bill in 2021 but beat the tax office in a NSW Supreme Court decision.<\/p>\n
But their success was overturned by the Court of Appeal last year, which challenged Uber for minimising its role as nothing more than connecting drivers and riders.<\/p>\n
In its appeal, Uber had argued that payroll tax should not be imposed on it for providing “mere administrative payment arrangements”.<\/p>\n
It claimed its drivers were not providing their driving services directly to Uber and that there was no connection between the fares Uber paid its drivers and their work performance.<\/p>\n
But High Court Chief Justice Stephen Gageler said that there was a direct relationship between a driver’s performance and the fares Uber paid to drivers for that work, which meant they were deemed to be “wages” captured by payroll tax laws.<\/p>\n
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<\/p>\n
The High Court, by majority, dismissed Uber’s appeal. (ABC News: Matt Roberts)<\/p>\n
Justice Gageler said contractor provisions had recently been re-enacted in NSW and Victorian tax legislation which were “speaking in the present” to the emerging gig economy.<\/p>\n
In a joint judgment, Justice Michelle Gordon, James Edelman, Jacqueline Gleeson, Jayne Jagot and Robert Beech-Jones agreed with him, adding that contractor provisions were intended by parliament as one measure designed to “catch schemes designed to avoid liability for payroll tax”.<\/p>\n
They agreed with the lower court that Uber’s business model depended on collecting money from riders on a per-trip basis and keeping a service fee, and that the driver’s service was what allowed Uber to legally do so.<\/p>\n
“Drivers clearly ‘supply’ a service to Uber by doing something that is necessary for Uber to derive service fees and to continue its business,” their judgment said.<\/p>\n
“The remitted amounts from Uber to a driver are paid or payable for or in relation to the performance of work (driving services) relating to a relevant contract \u2026 and are therefore deemed to be wages.”<\/p>\n
Justice Simon Steward dissented.<\/p>\n
The decision by the High Court leaves the door open for other states to pursue more aggressive interpretations of tax provisions designed to protect the traditional “employer-employee relationship” from manipulation by use of “so-called contractors to replace wages staff”.<\/p>\n
Union slams ‘insidiously created’ model<\/p>\n
The Transport Workers’ Union said it welcomed the High Court’s decision, calling it a “critical reality check to companies seeking to skirt our laws”.<\/p>\n
“Even companies who engage workers who may not be employees will have to pay their fair share,” TWU National Secretary Michael Kaine said.<\/p>\n
“Uber’s entire business model has been insidiously created by trying to distance itself from obligations under our laws, while reaping all the profits.<\/p>\n
“But the time is up for gig behemoths and other tech companies who have used loopholes to squeeze from our communities and contribute nothing in return”.<\/p>\n","protected":false},"excerpt":{"rendered":"Uber will have to fork out $81 million after the High Court of Australia determined the rideshare company…\n","protected":false},"author":2,"featured_media":951768,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[2666,64,63,2667,27595,31861,2668,44,37486,11523],"class_list":["post-951767","post","type-post","status-publish","format-standard","has-post-thumbnail","category-australia","tag-act","tag-au","tag-australia","tag-canberra","tag-gig-economy","tag-high-court","tag-local-stories","tag-news","tag-rideshare","tag-uber"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/951767","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=951767"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/951767\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/951768"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=951767"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=951767"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=951767"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}