The long-running saga on the VAT treatment of ride hailing apps has had another update as Bolt Services UK Limited (Bolt) who offer on-demand private hire services, contended the rate payable should fall within TOMS because their ride hailing services are for the benefit of travellers and are of a kind commonly provided by tour operators or travel agents. They also pointed out that to treat these services as falling outside TOMS would lead to distortion of competition and a breach of neutrality between traders providing travel services of a similar kind. Conversely, HMRC argued that Bolt was not a tour operator, nor travel agent and it did not make the type of supplies commonly provided by tour operators or travel agents.

It therefore fell to Judge Greg Sinfield to consider if the services Bolt supplies conformed to a) Provide services of a kind commonly provided by tour operators and travel agents and b) Supply the services of the drivers to the passengers without material alteration or further processing. In respect of a) Mr Sinfield considered that the correct approach was to take a high level or general view and so concluded that passenger transport services are the kind of services commonly provided by tour operators or travel agents, and in respect of b) he concluded that, whilst there is an obvious indirect benefit to Bolt, the drivers’ services directly benefited the travellers and so were not materially altered or processed. As such, the VAT liability for Bolt is on the margin only, not on the full fare. An excellent result for Bolt!

Joint VAT Consultative Committee (JVCC) – VAT Registration subgroup

The JVCC falls within the HMRC sponsored forum to exchange views on, and discuss proposed changes to, customs procedures and documentation relating to the entry and clearance of goods. It gives the opportunity for HM Revenue and Customs (HMRC) to consider representations from more than 40 member organisations. Of which, The Chartered Institute of Taxation (CIOT) is one. 

CIOT representatives attended this meeting and matters discussed included the performance statistics of the VAT registration team*, delays in VAT group amendment requests, delays in receiving VAT certificates by post, the format of some VAT group certificates**, automatic rejections on certain trade classes and compulsory VAT registration requests. Additionally, the committee discussed the legislative changes for Companies House that include director identity verification, and the ongoing work on 64-8 authorisations. Points were raised by the stakeholders in attendance as to whether the online portal can be updated to allow more information to be attached to the online application, on the issues experienced with the transfers of going concerns/changes of legal entity and the difficulties with recording the place of business for virtual offices.

* The CIOT is currently able to escalate cases that are beyond 45 working days (contact technical@ciot.org.uk)

**Now fixed by HMRC

Thank you for taking the time to read this VATwatch round-up.