Uber lost one of its most successful dealmakers at a time when the company feared his position at the cab-hailing app would undermine its tax avoidance structure, leaked documents suggest.
The leaked notes record that Fraser Robinson – one of Uber’s star executives who was based in London and had led its $3.5bn investment deal with Saudi Arabia in 2016 – was told by a senior executive that he would “have to move to AMS [Amsterdam]”. Uber was seeking to persuade UK tax collectors that the company was not being partly managed – and therefore taxable – in the UK.
A document in the Uber files, a trove of confidential files leaked to the Guardian, noted: “[Robinson] refused to move to AMS … HMRC claim that Uber’s EMEA [Europe, Middle East and Africa] earnings [are] taxable in UK because of Fraser.”
Robinson, who was not responsible for Uber’s tax structure, stepped down from the company in 2017 after refusing to move to Uber’s international headquarters and tax base in Amsterdam. He is understood to have resisted Uber’s request for family reasons and a source said he was already thinking about other challenges after a successful stint at the company.
He was a prized employee and was described internally as the executive who “spearheaded some of the company’s most transformational deals”, including the investment from Saudi Arabia’s Public Investment Fund (PIF), “which at the time was the largest private placement in history”.
The revelations also raise questions for the former UK chancellor George Osborne, who the leaked documents suggest was a private supporter of the US company’s efforts to grow its UK business, just as the company simultaneously positioned itself to avoid future UK taxes.
Osborne met the Uber founder Travis Kalanick at the World Economic Forum in Davos during January 2016 – just days after the company had won a major UK regulatory victory when Transport for London (TfL) abandoned proposals to tighten the regulation of private-hire vehicles.
In a leaked email titled “Davos feedback” sent after the conference, Uber’s chief European lobbyist, Mark MacGann, said: “George Osborne is a strong advocate. He liked to believe that he’s responsible for the positive TfL consultation outcome.”
If the email reflected reality, the British chancellor had seemingly been assisting a US company just as it was attempting to avoid paying UK taxes.
A former HMRC tax inspector suggested to the Guardian: “Having senior guys based in London will always carry a risk that HMRC might assert that there is UK [permanent establishment] of the … company or even that the … company is being run from London.
“So they may have felt exposed to a serious HMRC challenge … and needed to put their house in order quickly.”
Uber, which has only once recorded a global annual profit, had created a corporate structure similar to numerous other US firms whereby profits could be diverted offshore – frequently to Amsterdam. The structures, which are legal but arguably unethical, have resulted in criticism of some major US companies employing them to avoid UK taxes, including Starbucks and Google.
Under the model, passengers paid millions of pounds in fares from Uber rides in the UK directly to a Dutch-based payments processing company. Uber could then argue that profits on those rides should be taxed offshore – even though the transactions physically took place in the UK – unless HMRC could establish that the global company had a UK corporate presence.
Instead, the cab-hailing app’s UK firm primarily received its revenue from an Amsterdam sister company, which paid the London firm for “marketing services” – which resulted in £59.5m of revenues and £54.9m of costs in 2017, according to accounts filed at Companies House.
A spokesperson for Osborne said: “While the government inherited from its predecessors a tax code that meant the tech companies paid little tax, it was George Osborne as chancellor who – with Germany – initiated the international OECD negotiations to change that, a process which led to the widely welcomed global agreement last year.”
Uber said: “Uber is committed to complying with tax laws and regulations where we operate, including in the UK and the Netherlands.”