Taxi for HMRC

HMRC lost an appeal at the Upper Tribunal against Bolt, a taxi ride-hailing app, regarding VAT charges on taxi fares. 

The UT upheld the First Tier Tribunal's decision that Bolt's services fall under the Tour Operators’ Margin Scheme (TOMS), reducing their VAT liability.  HMRC argued that Bolt's services were not comparable to those of tour operators, but the tribunal disagreed, stating that the nature of the services, not the classification of the provider, is what matters. 

This could be a landmark ruling, and is significant for Bolt and other licenced operators.  As always the devil’s in the detail – for example operators are licenced in different ways across the country – with some required to act as the principal and others as the driver’s agent. 

HMRC is reviewing the decision and may take the case to the Court of Appeal, but even if they accept this could look to defend their position by restricting the cross application where they consider this doesn’t sit on all fours.  If this case effects you or your clients, we’d recommend taking advice at an early stage.