OVERTURNED: Court of Appeal backs HMRC in major VAT dispute with Bolt over ride-hailing services that could impact other operators
- Perry Richardson
- Jun 13
- 3 min read
The Court of Appeal has ruled in favour of HM Revenue & Customs (HMRC) in a landmark VAT dispute with Bolt Services UK Ltd, overturning earlier tribunal decisions that had allowed the ride-hailing firm to apply the Tour Operators’ Margin Scheme (TOMS) to its private hire vehicle (PHV) operations.
In a judgment handed down on 12 June 2026, the Court of Appeal allowed HMRC’s appeal against a previous Upper Tribunal ruling, concluding that Bolt’s on-demand minicab services do not fall within the special VAT scheme designed for travel agents and tour operators.
The case centred on whether Bolt could account for VAT only on its margin, rather than on the full passenger fare. Since August 2022, Bolt has operated as principal in its transactions, contracting separately with passengers and self-employed drivers. Under normal VAT rules, this means VAT is chargeable on the entire fare. Bolt argued that its services qualified for TOMS, which would significantly reduce its VAT liability by taxing only the margin between what passengers pay and what Bolt pays drivers.
The financial stakes are huge. The court noted that Bolt’s appeal alone involved an estimated £190 million, while other pending cases linked to the outcome are understood to involve sums exceeding £1 billion.
Ruling overturns earlier tribunal victories for Bolt and could have significant implications for the wider private hire and ride-hailing sector
Bolt had previously secured victories at both the First-tier Tribunal and the Upper Tribunal. Those courts accepted the company’s argument that passenger transport was, at a high level, a type of service commonly provided by travel agents and tour operators. They also rejected HMRC’s contention that Bolt’s platform, technology and operator role materially altered the transport services supplied by drivers.
However, Lady Justice Falk, delivering the leading judgment, found that both tribunals had adopted an overly broad interpretation of the scheme. She said the critical issue was whether Bolt’s services were identical or comparable to those supplied by travel agents or tour operators. The court concluded they were not.
The judgment highlighted findings made by the First-tier Tribunal itself that travel agents and tour operators do not commonly provide on-demand rides from point A to point B that are the same as, or similar to, those offered by Bolt. The Court of Appeal said that conclusion should have led to Bolt’s case failing.
Lady Justice Falk wrote that businesses operating as travel agents and tour operators “do not compete in the provision of mini-cab rides” and that applying the special VAT scheme to Bolt was not necessary to achieve the objectives for which TOMS was created.
The court also stressed that the scheme was introduced to address practical VAT difficulties faced by travel agents and tour operators, particularly where multiple travel services are combined across different jurisdictions. While European case law has extended the scheme beyond traditional travel businesses in certain circumstances, the court said those extensions only apply where the services supplied are identical or genuinely comparable to those of travel agents and tour operators.
Rejecting Bolt’s argument that the provision of passenger transport alone should be sufficient, the court found that ride-hailing platforms operate within a distinct minicab sector rather than the travel agent and tour operator market. Lady Justice Falk said that “no one can seriously suggest that travel agents and tour operators offer on-demand mini-cab rides, or anything comparable to them, whether through apps or otherwise.”
The court therefore allowed HMRC’s appeal, set aside the decisions of both the First-tier Tribunal and Upper Tribunal, and restored HMRC’s original February 2023 decision that Bolt’s ride-hailing services do not qualify for TOMS treatment.
The ruling is likely to be closely looked at across the ride-hailing and private hire sector, where similar VAT arrangements have been under scrutiny since operators were required to contract as principal following licensing and regulatory developments in England and Wales.
