HMRC won a landmark appeal against Bolt Services UK Limited arguing that the private hire ride hailing app could not avoid paying VAT on fares by using the tour operators’ margin scheme (TOMS).

Bolt had won earlier decisions at the First Tier Tribunal (FTT) and Upper Tribunal, which both came down in favour of the ride hailing app, saying its supplies of taxi rides were within TOMS.

The TOMS rule was implemented by section 53 of the Value Added Tax Act 1994 (VATA) and the Value Added Tax (Tour Operators) Order 1987 as amended (the TOMS order), and was designed to make VAT compliance more straightforward for travel agents and tour operators selling complex packages of services.