Posted on the 25th March 2025 in PHTM News

UK BOLT WINS TOUR OPERATORS MARGIN SCHEME VAT HEARING AS HMRC APPEAL DISMISSED

On 24 March the Upper Tribunal of the Tax and Chancery chamber rejected HMRC’s appeal to block ride sharer Bolt from using the Tour Operators Margin Scheme.

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, thus reducing VAT.

Bolt won an initial victory in 2023 when the tax tribunal ruled that “mobile ride-hailing services” should be covered by TOMS.

However, HMRC’s appeal at the Upper Tribunal was dismissed, although it is now considering a further challenge in the Court of Appeal.

A spokesman said: “The Government is carefully reviewing the tribunal’s decision and will consider next steps.”

A Bolt spokesman said: “We welcome the court’s decision, which reaffirms that Bolt’s use of the Tour Operators’ Margin Scheme is fully compliant with UK tax law.

“This is a win for the 100,000 driver-entrepreneurs who earn through our platform, and the millions of passengers who depend on affordable and accessible transport.”

Jonathan Main, VAT and indirect tax partner at MHA Chartered Accountants said: "This is the latest refuelling stop in a taxi ride which began in 2021 at The Supreme Court, concerning the worker status of Uber drivers. We have since driven past a London landmark on the TfL licensing requirements for private hire operators, again with Uber at the wheel.

"The Uber journey is headed back to The Supreme Court for a second time in July this year, this time to determine the licensing requirements for private hire operators outside London.

"The Uber litigation about worker status and particularly licensing requirements has caused London-centric operators to rethink their VAT status, as TfL requires operators to act as principal not agent when passengers use its ride hailing services.

"In 2022 Bolt implemented a VAT structure known as the Tour Operators Margin Scheme (TOMS), which reduced its VAT bill to the margin between the amount paid to the driver and the amount charged to the passenger.

"In a landmark judgement of the Upper Tribunal today, Bolt has successfully defended its preferred VAT position against continued challenge from HMRC. This will be a huge boost to Bolt and no doubt any other operator licensed by TfL.

"However, for operators licensed by local authorities other than TfL, the Bolt decision has little impact. Local authorities continue to issue licences which permit operators to act as the driver’s agent and in the unlikely event that a taxi driver earns income above the VAT registration threshold, the driver is required to pay VAT.

We await the licensing decision of the Supreme Court hearing in July for the future of taxi licensing and operators’ VAT bills outside London."


Read another story

    read newspaper
    read newspaper
    read newspaper

    Follow PHTM
    LinkedIn

    phtm whatsapp channel

    PHTM Trade Index

      • Razon
      • hollogram
      • patons insurance
      • Autocab
      • taxi insurer
      • insure taxi
      • Birkdale Insurance Group
      • iCabbi
      • The Taxi Centre
      • Cab Direct
      • Taxi CCTV
      • Acorn Taxi Insurance
      • Patterson Law
      • EaziTax