Bolt's UK tax tribunal win could prove good news for Uber

Bolt’s UK tax case win could prove good news for Uber

  • LONDON : A significant victory for Estonian ride-hailing and food delivery startup Bolt against Britain’s tax authority last week could prove to be good news for its rival Uber.
  • Bolt took on HM Revenue and Customs (HMRC) over whether it was due to pay a 20 per cent tax charge on its gross income from customers or its margin.
  • The company had argued it should be allowed to use a tax scheme originally created for tour operators or travel agents, called the Tour Operators Margin Scheme (TOMS).
  • This meant Bolt would only pay value added tax (VAT) on its margin, a claim which was rejected by HMRC.
  • But a London tax tribunal decided on Friday that the services supplied by Bolt are “services of a kind … commonly provided by tour operators or travel agents”, meaning Bolt only has to pay VAT on its margin.
  • Bolt declined to comment on the decision.
  • An HMRC spokesperson said: “We are disappointed with the result and are carefully considering the tribunal’s decision.
  • “Our view remains that the Tour Operators Margin Scheme does not apply to mini-cab businesses.”
  • The tribunal’s decision did not state the difference in Bolt’s tax liability, though it is likely to be significant.
  • The decision also raises the possibility of Uber being victorious in its similar battle with HMRC, which Uber’s financial results from August state is worth around 386 million pounds ($490 million).
  • The hearing of Uber’s case is set to take place in 2024. Uber declined to comment on last week’s decision in Bolt’s case.

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