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Bolt Services UK Limited v The Commissioners for HMRC

[2023] UKFTT 1043 (TC)
Bolt, a ride-hailing app, argued it should pay less VAT under a special scheme for travel agents. A judge agreed, saying ride-hailing is like a service travel agents offer (like airport transfers) and the app doesn't change that. Bolt wins, meaning it likely pays less tax.

Key Facts

  • Bolt Services UK Limited (Bolt) appealed an HMRC decision that the Tour Operators Margin Scheme (TOMS) did not apply to its mobile ride-hailing services.
  • Bolt acted as principal, contracting separately with drivers and passengers.
  • The appeal concerned on-demand rides only, excluding scheduled rides, business accounts, Black Cab rides, and Bolt Tours.
  • Bolt argued that its services were of a kind commonly provided by tour operators and travel agents, preventing competition distortions.
  • HMRC argued Bolt was not a tour operator/agent and that the services were in-house supplies or materially altered/further processed.

Legal Principles

The TOMS applies to services of a kind commonly provided by tour operators or travel agents for the benefit of travellers.

Section 53 VATA 1994 and the TOMS Order

The EU special scheme (Articles 306-310 PVD) aims to avoid difficulties for travel agents from normal VAT rules on multiple services and locations. It applies to services bought in from third parties, not in-house services.

Articles 306-310 PVD, ECJ and CJEU case law (Van Ginkel, Madgett and Baldwin, ISt, Minerva, Star Coaches, Kozak, EC v Spain, Alpenchalets, C)

The special scheme applies even if the supplier isn't a traditional travel agent, as long as the transactions are identical or comparable, preventing competition distortion.

CJEU case law (Madgett and Baldwin, ISt, C)

A single supply of accommodation, even without transport, falls under the special scheme.

CJEU case law (Alpenchalets, C)

Transport services alone might fall under the scheme if accompanied by other travel-related services (information, advice, reservation).

CJEU case law (Star Coaches, Alpenchalets)

The “without material alteration or further processing” requirement in the TOMS Order means the services shouldn't become in-house supplies.

Article 3(1)(b) TOMS Order, Madgett and Baldwin, Kozak

Outcomes

Appeal allowed.

Bolt's ride-hailing services are a kind commonly provided by tour operators/travel agents (passenger transport is a travel service). The services weren't in-house supplies or materially altered. Even if additional elements were needed, Bolt's platform services, customer support, and travel advice suffice.

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