Uber Case in U.K. Could Become Model for How to Tax Gig Economy

A U.K. tax case could alter how Uber Technologies Inc. does business across Europe and put pressure on the country’s tax authority to retroactively collect up to 1.5 billion pounds in value-added taxes.

The case, brought by tax lawyer Jolyon Maugham against Her Majesty’s Revenue and Customs, alleges that the U.K.'s tax authority hasn’t properly reviewed the rideshare company’s VAT liability.

In the U.K. and much of the European Union, Uber for tax purposes is considered an intermediary platform that connects self-employed drivers to clients. That means drivers are responsible for collecting VAT, but most rides end up not ...