- The Upper Tribunal’s decision in HMRC v Bolt Services UK Ltd may impact tax for ride-hailing companies like Uber and FREENOW.
- The tribunal ruled that on-demand private hire vehicle services can use the Tour Operators’ Margin Scheme (TOMS) for VAT.
- This allows VAT to be charged only on the operator’s margin, not the full fare.
- Uber operates as a principal, similar to Bolt, and could apply TOMS to reduce VAT liabilities in the UK.
- Uber might receive £1.3 billion back from HMRC if it falls under TOMS.
- The judgment depends on whether services are commonly provided by travel agents or tour operators and if the operator buys services without altering them.
- Airport transfers, station drop-offs, and point-to-point journeys via apps meet these criteria.
- Other private hire vehicle firms may seek to apply TOMS, especially those handling booking, pricing, and support.
- HMRC aimed to limit TOMS to traditional travel businesses, but the court’s broader view could change VAT accounting in the sector.
Source: taxi-point.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
