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In a major VAT ruling issued on 24 March 2025, the UK Upper Tribunal dismissed HMRC’s appeal in the case against Bolt Services UK Limited, confirming that Bolt’s mobile ride-hailing services qualify to apply the Tour Operators’ Margin Scheme (TOMS).
The decision isn’t just a win for Bolt, it’s a turning point in how traditional VAT rules are applied to modern, tech-driven business models. The ruling opens the door for broader application of TOMS across platform-based services and signals a more inclusive interpretation of what it means to provide a “travel service” in today’s economy.
Let’s explore the background, what this means for VAT treatment, and how businesses can respond.
Bolt, a major ride-hailing platform, operates as a private hire vehicle (PHV) operator in the UK. Since August 2022, it has acted as principal in providing transport services purchasing them from self-employed drivers and reselling them to end customers via its app.
Bolt sought a non-statutory ruling from HMRC regarding whether its ride-hailing services could fall under the scope of TOMS, a simplified VAT scheme traditionally applied to tour operators and travel agents.
HMRC rejected Bolt’s claim. In their view, Bolt’s services were not comparable to those offered by tour operators and therefore fell outside the scope of TOMS. Bolt appealed.
The First-tier Tribunal (FTT) sided with Bolt in December 2023, ruling that its services could fall under TOMS. HMRC subsequently escalated the case to the Upper Tribunal, where the FTT’s ruling was upheld.
The Tour Operators’ Margin Scheme is a special VAT regime designed for businesses that:
Instead of charging VAT on the total sale price, TOMS applies VAT only to the margin, being the difference between what the customer pays and what the company paid its suppliers.
Key features:
TOMS was created to deal with the complexity of taxing cross-border travel services but until recently, was largely seen as the domain of traditional tour operators offering packaged holidays. The Bolt case is reshaping that perspective.
At the heart of this dispute was a deceptively simple question:
Are Bolt’s ride-hailing services “of a kind commonly provided by tour operators or travel agents”?
HMRC said no. They argued that Bolt’s real-time, on-demand taxi rides lacked the packaging, distance, or structure typical of traditional travel services.
But the Tribunal took a more high-level view. They ruled that:
This last point is significant: the court rejected HMRC’s argument that only scheduled or pre-booked transport could qualify. The Tribunal reasoned that the ability to choose pick-up times or destinations doesn’t change the fact that the service being sold is passenger transport.
This isn’t a one-off case. It’s a statement about how VAT law can and should evolve alongside technology.
Bolt doesn’t own cars or employ drivers but it contracts with both drivers and customers as principal. That structure mirrors what many marketplaces and gig economy platforms are doing today. The ruling affirms that such models can still qualify for TOMS, provided they meet the scheme’s criteria.
This case expands the practical interpretation of TOMS beyond packaged holidays or multi-day itineraries. Transport services, even when provided as single journeys or transfers, may qualify especially when supported by digital platforms offering booking, support, and travel advice.
For eligible businesses, TOMS reduces VAT payable to only the profit margin, rather than the full transaction value. This can significantly lower VAT liabilities, a key benefit for high-volume, low-margin providers like ride-hailing apps or digital travel platforms.
HMRC’s argument was rooted in tradition. They argued that:
The Tribunal rejected these points. It found that distinguishing services based on whether they’re booked 1 hour or 1 day in advance is arbitrary, and that transport whether by train, taxi, or private hire remains fundamentally a travel service.
The Tribunal favoured a flexible, commercially realistic approach. Passenger transport services, even when delivered through apps or intermediaries, fall within the broad category of travel services.
You don’t need to package transport with accommodation, excursions, or insurance. A single, bought-in service like airport transport can still qualify as long as it’s resold as principal and not materially altered.
Bolt’s app-based features journey planning, helpdesk support, and travel-related content were viewed as complementary, not disqualifying. They actually helped reinforce the view that Bolt provided a customer-facing travel experience.
If your company:
…then this decision supports your potential inclusion under TOMS.
That includes:
By qualifying for TOMS, these businesses could streamline their VAT reporting and reduce liabilities as long as they meet the structural requirements.
If you suspect your services might qualify for TOMS in light of this decision, here are practical next steps:
The Bolt ruling marks a pivotal moment in the evolution of VAT interpretation. It demonstrates that VAT law can adapt to modern business realities and that digital-first transport and travel services deserve equal consideration under schemes like TOMS.
At VAT IT Reclaim, we help businesses navigate these complex transitions, from compliance risks to reclaim opportunities.
Want to know if your transport services qualify for TOMS? Let’s talk.
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