The VAT treatment of ride-hailing has been one of the most-watched questions in the platform economy, and on 12 June 2026 the Court of Appeal gave a significant answer. In HMRC v Bolt Services UK Ltd [2026] EWCA Civ 720, the Court reversed two earlier tribunal wins for Bolt and held that ride-hailing does not fall within the Tour Operators' Margin Scheme (TOMS).
What the case was about
Under TOMS, a business that buys in and re-supplies travel services accounts for VAT only on its margin rather than on the full price paid by the customer. Bolt argued that its private-hire (minicab) ride-hailing offering fell within the Scheme — which, if right, would substantially reduce the VAT due on its fares.
The First-tier Tribunal and then the Upper Tribunal (Mr Justice Meade and Judge Greenbank) had accepted Bolt's case. HMRC appealed to the Court of Appeal.
What the Court of Appeal decided
The Court of Appeal (Lady Justice Falk giving the lead judgment, with Lord Justice Arnold and the Chancellor, Sir Colin Birss, agreeing) allowed HMRC's appeal, set aside the decisions below and re-made them, so that Bolt's challenge fails.
The reasoning turned on how a typical consumer would understand what Bolt supplies. A typical customer recognises Bolt as operating in the minicab sector, not as conducting activities akin to those of a travel agent or tour operator. The Court held that the First-tier Tribunal had erred in treating Bolt's services as comparable to those within the Scheme — and in particular had misread the European case law (the Madgett & Baldwin discussion of a hotel booking local taxis), which concerned services that were ancillary to a package, not standalone taxi rides. The fact that some Bolt journeys happen to run to or from airports did not turn ride-hailing into the kind of travel service the Scheme is aimed at.
The Court noted that there are related judicial review proceedings stayed behind the appeal, and was careful to confine itself to the VAT issue before it.
Why it matters
This is a consequential decision for the gig economy and for VAT advisers:
- Ride-hailing operators cannot rely on TOMS to limit VAT to their margin. On this analysis, private-hire ride-hailing is a standard supply of transport services, taxed on the full fare — a materially larger VAT base.
- It reverses a taxpayer win at the Upper Tribunal, so anyone who had structured (or planned) on the basis of the tribunals' approach will need to revisit it.
- It is part of the wider VAT battle across the ride-hailing sector, where operators including Bolt and others have tested how the rules apply to app-based private hire. Advisers to platform businesses, and to the transport sector generally, should treat this as the current leading position pending any further appeal.
For VAT and indirect-tax practitioners, Bolt is a clear, recent marker of where the Tour Operators' Margin Scheme stops.
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