In HMRC v Bolt Services UK Ltd [2025] UKUT 0100, the Upper Tribunal (UT) found that mobile app ride-hailing services were within the scope of the Tour Operators Margin Scheme (TOMS).
Bolt Services UK Ltd (‘Bolt’) provides ‘ride-hailing’ services with a business model similar to that of Uber.
- Bolt acts as Principal in the re-supply of passenger transport by Private Hire Vehicles (PHVs), which it buys from self-employed PHV drivers and re-supplies to its customers.
- Bolt contracts separately with both the drivers and passengers, and is responsible for all invoicing and remittance of payments. There is no contractual relationship between the drivers and the customers.
- Bolt requested a non-statutory ruling from HMRC about the VAT treatment of mobile ride-hailing services.
- HMRC stated they did not consider Bolt’s on-demand PHV services to be within the scope of the Tour Operators Margin Scheme (TOMS).
- Bolt Appealed to the First Tier Tribunal (FTT).
Legislation
- Section 53 of VATA 1994 provides for specified supplies made by a tour operator to be within TOMS.
- ‘Tour operator’ includes 'A travel agent acting as principal and any other person providing for the benefit of travellers services of any kind commonly provided by tour operators or travel agents'.
- For supplies to be within TOMS, they must be ‘designated travel services’.
- Article 3 of The Value Added Tax Order (Tour Operators) Order 1987 provides that a ‘designated travel service’ is a supply of goods or services acquired for the purposes of a business and supplied for the benefit of a traveller without material alteration or further processing.
The FTT found that:
- Bolt was not a travel agent or tour operator within the usual meaning of those terms.
- Bolt's passengers were travellers for the purposes of the TOMS.
- Bolt's ride-hailing services were supplied for the benefit of travellers.
- The ride-hailing services were of a kind commonly provided by tour operators or travel agents.
- Bolt supplied the services of the drivers to the passengers without material alteration or further processing and so the ride-hailing services were not in-house services that had to be excluded from the TOMS.
The FTT allowed Bolt’s appeal, finding that the services supplied were within the scope of TOMS.
HMRC appealed to the Upper Tribunal (UT), arguing that the FTT had:
- Erred in law when considering whether the supplies were the same or similar to those commonly provided by a tour operator or travel agent. The FTT’s approach had been too high-level.
- Ignored and/or misinterpreted key features of Bolt’s mobile ride-hailing supplies and their relevance to determining whether the supplies fell within the TOMS.
- In particular, the fact that Bolt’s services were ‘on demand’ meant that they were not similar services to those made by a travel agent or tour operator.
- Erred in rejecting HMRC’s alternative positions that Bolt’s supplies were materially altered or ‘in-house’ supplies such as to fall outside the TOMS.
- HMRC argued that the bought-in drivers' services were changed by using Bolt's own resources and, therefore, they were in-house or materially altered because they were not merely passed on.
The UT found that the FTT had not erred in law in considering whether Bolt’s services were similar to those made by a travel agent or tour operator.
- The FTT’s method of considering whether Bolt’s supplies were comparable to those of an established travel agent or tour operator was sufficient and not too ‘high-level’. A detailed approach to the question of comparability would be likely to prove a difficult and resource-intensive exercise.
- The ‘on demand’ nature of Bolt’s supplies did not distinguish those supplies from those made by a travel agent or tour operator. Whether journeys are booked one week, one day or one minute in advance did not distinguish Bolt’s journeys from taxi journeys provided by a travel agent or tour operator.
The UT found that the FTT had not erred in law when considering whether Bolt’s services were provided to the customer without material alteration or further processing.
- The driver provided the services of conveying the customer from A to B, in a vehicle that was properly maintained, insured, taxed and had a PHV licence. The nature of those services did not change when provided to the customer by Bolt.
- Bolt’s reservation and payment service may have added value to the supply, but no more than a traditional travel agent who organises a journey or tour for a client.
The appeal was dismissed.
Useful guides on this topic
Agents and principals
What is an agent for VAT purposes? What is a principal? When do the agency rules apply?
Appeals: VAT
How do I appeal a VAT penalty? How can I request a Statutory Review? How do I appeal an HMRC decision?
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