Bolt wins appeal to use Tour Operators Margin Scheme to lower VAT charge
A UK’s Upper Tribunal has 24 March 2025 rejected HMRC’s appeal to block ride sharer Bolt from using TOMS. The case centred on whether Bolt’s app-based services, where it acts as principal in supplying transport from self-employed drivers, should qualify under TOMS. The driver remains independent, so Bolt is not the principal in the transaction and therefore not responsible for full VAT.
This means Bolt need only charge VAT on its margin, and not the whole service, reducing VAT.
Dec 2023: First Tier Tribunal backs Bolt for lower VAT
First-tier tribunal case has ruled in favour of deliver service operator, Bolt, over HMRC. The tribunal ruled that these mobile ride-hailing services are passenger transport, commonly provided by tour operators or travel agents, and therefore falls within the scope of TOMS.
Bolt is therefore only liable to 20% standard VAT on its margin of the service, and not the full amount charged to the customer.
Ruling to boost Uber’s UK case?
The ruling may influence the ongoing Uber UK VAT liability, which the ride sharer has made provision for £386m in its latest financial statements. This was on the basis that it would not qualify as a TOMS service and would have to repay full VAT to HMRC.
Bolt, like Uber, offers mobile ride-hailing services on-demand via smartphone applications. It sought assurance from HMRC that it qualified for use of the Tour Operators Margin Scheme (TOMS). This was declined by HMRC, and the matter referred for this decision.
HMRC now has the opportunity to appeal this decision.
