LONDON (Reuters) – A significant victory for Estonian ride-hailing and food delivery startup Bolt against Britain’s tax authority last week could prove to be positive news for its rival Uber.
Bolt took on HM Revenue and Customs (HMRC) over whether it was liable to pay a 20% 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 designed 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, an argument which was rejected by HMRC.
But a London tax tribunal ruled 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 ruling.
An HMRC spokesperson said: “We are disappointed with the ruling 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 ruling did not state the difference in Bolt’s tax liability, though it is likely to be significant.
The decision also raises the prospect 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 likely to take place in 2024. Uber declined to comment on last week’s ruling in Bolt’s case.
(Reporting by Sam Tobin, editing by Ed Osmond)
