UK tax authority wins Bolt VAT appeal, ruling may shape Uber case
A UK court ruling in a long-running tax dispute is tightening pressure on ride-hailing operators over how value added tax is applied to fares. The decision backs HM Revenue and Customs against Bolt in a case worth about 190 million pounds and may influence Uber's similar pending challenge.
Highlights
- Bolt loses its appeal as London's Court of Appeal rules that VAT at 20% applies to the full fare, not just Bolt's margin, in a £190 million dispute.
- The verdict overturns two prior tribunal decisions in Bolt's favor and aligns with HM Revenue and Customs' tax interpretation for ride-hailing services.
- This ruling sets a precedent likely to affect the outcome of Uber's similar pending case and the broader UK ride-hailing industry's tax liabilities.
Court of Appeal backs HMRC
As reported by Reuters, London's Court of Appeal rules in favour of HM Revenue and Customs in its dispute with Estonian ride-hailing and food delivery company Bolt, reversing two earlier tribunal decisions.Bolt argues in the roughly 190 million pound dispute that it is liable to charge VAT at 20% only on its margin, rather than on the full fare paid by customers. The appeal court rejects that position and sides with the UK tax authority.
Implications for UK ride-hailing market
The ruling could carry wider consequences for the sector because Uber has a similar case pending in the UK courts. That case has been on hold while Bolt's dispute continues, making the latest decision an important reference point for the industry's tax treatment.The case highlights the financial stakes for app-based transport platforms operating in the UK, where the question of whether VAT applies to the full customer fare or only a company's margin can materially affect costs and business models.
In our earlier coverage of the UK economy’s April contraction, we noted that GDP slipped 0.1% as services and production weakened while construction was the only sector to grow. We also highlighted how persistent inflation and higher interest rates are squeezing household finances and creating a tougher operating environment for businesses across the UK.
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