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UK TOMS VAT margin scheme on mobile ride-hailing services

Bolt wins right to only charge VAT only on its margin as Tour Operators Margin Scheme

A UK First-tier tribunal case has ruled in favour of deliver service operator, Bolt, over HMRC.  The tribunal ruled that these mobile ride-hailing services are passenger transport, commonly provided by tour operators or travel agents, and therefore falls within the scope of TOMS.

Bolt is therefore only liable to 20% standard VAT on its margin of the service, and not the full amount charged to the customer.

Ruling to boost Uber’s UK case?

The ruling may influence the ongoing Uber UK VAT liability, which the ride sharer has made provision for £386m in its latest financial statements. This was on the basis that it would not qualify as a TOMS service and would have to repay full VAT to HMRC.

Bolt, like Uber, offers mobile ride-hailing services on-demand via smartphone applications. It sought assurance from HMRC that it qualified for use of the Tour Operators Margin Scheme (TOMS). This was declined by HMRC, and the matter referred for this decision.

HMRC now has the opportunity to appeal this decision.


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