VAT & TOMS

The Court of Appeal handed down judgment in HMRC v Bolt Services UK Limited on 12 June 2026, allowing HMRC's appeal and overturning decisions of both the First-tier Tribunal and the Upper Tribunal. The case concerned whether Bolt's on-demand ride-hailing services were eligible for the Tour Operators' Margin Scheme.

Under TOMS, a business accounts for VAT only on its margin - the difference between the amount charged to the customer and the cost of acquiring the underlying supply. The alternative is to account for VAT on the full fare. For Bolt, the difference was material: the case involved an estimated £190 million, with related cases pending that involve sums exceeding £1 billion.

Both lower tribunals had accepted what was described as a "high-level" approach - that passenger transport is, broadly speaking, the type of service provided by travel agents and tour operators, and that Bolt's services therefore fell within the scheme. Lady Justice Falk, delivering the leading judgment, rejected that reasoning. The court found it was not sufficient to identify a general category of service at a high level of abstraction. Ride-hailing platforms operate within a distinct minicab sector, not the travel agent and tour operator market, and applying TOMS to Bolt was not necessary to achieve the objectives for which the scheme was created.

The implications extend well beyond Bolt. Uber's parallel TOMS appeal had been stayed pending this outcome and is now directly in the frame. Any platform business that had structured its VAT position on the basis of the lower tribunal decisions - or was contemplating doing so - will need to reassess that position carefully.

The decision also carries a broader message about the limits of purposive interpretation in VAT. The court was not persuaded that proximity to the general subject matter of a scheme is sufficient to bring a business within it. The question is whether the supply is genuinely of the kind the scheme was designed to address.

Businesses in the platform and gig economy sectors with exposure to TOMS, and advisers working in this area, should review their positions in light of the judgment.