Weekly VAT News

Bolt Services UK Limited: Application of TOMS to ride-hailing services – CA

The Court of Appeal has agreed with HMRC that supplies by Bolt Services UK Limited of private hire vehicle ride-hailing services did not fall within the tour operators’ margin scheme (TOMS). The Upper Tribunal and First-tier Tribunal had previously held that Bolt’s supplies were within TOMS. HMRC appealed against the FTT and UT decisions, and the CA has accepted HMRC’s primary argument that, contrary to the ‘high-level’ approach taken by the FTT and UT, the correct approach when considering the application of TOMS is to ask whether the supply in question is identical or at least comparable to the supplies of tour operators and travel agents. The CA found that Bolt’s services were not identical or comparable. Comparability must be assessed by reference to the aims of TOMS, namely that of preventing distortions of competition and inconsistent VAT treatment for truly similar services. HMRC’s secondary argument was that the FTT and UT had erred in concluding that the supplies made by drivers to Bolt were not ‘materially altered’ by Bolt and that Bolt’s supplies to its customers were not ‘in-house’ supplies. If the supplies were materially altered or in-house supplies, they would be outside the scope of TOMS. Given the CA’s conclusion on the primary argument, the CA did not need to consider HMRC’s secondary argument. The CA allowed HMRC’s appeal. (Contact: Donna Huggard)

Barclays Services Corporation & Anor: VAT grouping – UT

HMRC considered that Barclays Services Corporation (BSC), a US entity with a UK branch, was not eligible to join a Barclays VAT group because: BSC was not established, nor did it have a fixed establishment, in the UK; and even if BSC did have a UK fixed establishment, refusal was necessary for the ‘protection of the revenue’. HMRC also argued that even if the UK branch of BSC was in the VAT group, that should only impact the UK branch itself, not BSC as a whole, following the CJEU’s judgment in Danske Bank A/S. The Upper Tribunal has upheld HMRC’s refusal to allow BSC to join the VAT group. The UT first considered the application of Danske Bank, and concluded that imposing a territoriality condition would be contrary to the “underlying thrust of the [UK] legislation and its fundamental features”. Accordingly, the UK’s ‘whole entity’ approach to VAT grouping, whereby if a UK branch joins a VAT group the whole legal entity is a member of the VAT group, is preserved (as detailed in HMRC’s Revenue and Customs Brief 7 (2025)). The UT went on to agree with HMRC, and the August 2024 decision of the First-tier Tribunal, that BSC did not have a fixed establishment in the UK. The UT, adopting the same approach as the FTT, found that BSC did not have actual or comparable control (to that of an owner) over sufficient human and technical resources in the UK to make a meaningful contribution to the branch’s business. Although academic given the fixed establishment finding, the UT, disagreeing with the FTT, concluded that, even if BSC did have a UK fixed establishment, HMRC ‘could’ reasonably have decided to refuse the grouping application under the protection of the revenue provision. The UT dismissed Barclay’s appeal. See our Insights Article, Barclays Services Corporation & Anor – VAT grouping, for further information. (Contact: Nicole Faith)

Standard for customs intermediaries launched

A standard for customs intermediaries has been launched. The standard was sponsored by HMRC and developed by the British Standards Institution (BSI), following consultation and input from the customs intermediary sector. The standard sets out good practice, and aims to raise service quality and improve consistency across the sector. It is intended to help traders make informed choices when selecting a customs intermediary. HMRC’s guidance on the standard says that a separate (voluntary) certification scheme will be developed to sit alongside the standard. HMRC are working with external bodies to develop the scheme, which will be delivered by certification bodies independent of HMRC and accredited by the United Kingdom Accreditation Service (UKAS). (Contact: Jeffrie Mann)

This week’s VAT case calendar

On 16 or 17 June, the Court of Appeal will hear the taxpayers’ appeals in the case of St Patrick’s International College Limited & Ors on the application of VAT exemption for alternative providers of higher education.

On 17 June, there will be a CJEU judgment in Veronsaajien oikeudenvalvontayksikkö, a reference from Finland on the VAT exemption for the management of credit.