Taxi ride-hailing service qualifies for TOMS

The taxpayer Bolt Services UK Ltd (Bolt) provided passenger transport services in private hire vehicles (PHV) to travellers through its smartphone application. The traveller entered their chosen destination on the app and was given a price quote and estimated journey time for the trip which they can then accept or decline. The PHV owners – in business on their own account - are invited to accept the job or otherwise; they have the right to decline if they are not happy with say the fare offered by Bolt or the destination.

In October 2022 the company asked HMRC to confirm that its services qualified as a tour operator margin schemes (TOMS) supply ie output tax was only payable on the profit margin for a deal. As an example of the effect of TOMS consider a driver paid £10 for a trip by...