Citation Codes
Equivalent Citations
citation codes
See more information ...
Click here to read the full judgment
Revenue and Customs v Bolt Services UK Ltd
Smart Summary
Anonymised Summary of the Court of Appeal (Civil Division) Decision
Factual and Procedural Background
The Appellant challenged a decision of the Upper Tribunal ("UT") that supplies of on-demand private hire vehicle transport by the Respondent fell within the Special Scheme for Travel Agents (the "Scheme") in Articles 306–310 of Council Directive 2006/112/EC (the Principal VAT Directive, "PVD") and the UK implementing legislation (s.53 VATA and the TOMS Order). The UT had upheld a First-tier Tribunal ("FTT") decision allowing the Respondent's appeal against an HMRC decision dated 28 February 2023 (the "Decision"). The Respondent operates an app-based platform offering private hire vehicle journeys in multiple UK cities, with its largest market in The City; drivers register with the platform, provide and maintain their own vehicles and licences; since August 2022 the Respondent has acted as principal contracting separately with drivers and customers. The Respondent sought a ruling that the Scheme applied; HMRC refused; the FTT and then the UT allowed the Respondent's appeal. The Appellant obtained permission to appeal to the Court of Appeal.
Legal Issues Presented
- Whether the Respondent's on-demand private hire vehicle services fall within the Special Scheme for Travel Agents under Articles 306–310 PVD and the UK implementing legislation.
- Whether the UT erred in adopting a broad "high-level" comparability approach rather than requiring that the Respondent's supplies be identical or at least comparable to those of travel agents or tour operators (Ground 1).
- Whether the UT erred in concluding that drivers' supplies were not "materially altered or further processed" by the Respondent and that the Respondent's supplies were not "in-house" supplies (Ground 2).
Arguments of the Parties
Appellant's Arguments
- The Scheme targets activities of travel agents and tour operators who commonly supply multiple services often across borders; the Scheme does not extend to the transport sector generally.
- The UT erred in using a broad "high-level" approach; the Respondent's on-demand minicab services are neither identical nor commonly comparable to services of travel agents or tour operators, so the Scheme should not apply (Ground 1).
- The drivers' supplies are materially altered or subsumed by the Respondent so that an "in-house" analysis applies and the Scheme should be excluded (Ground 2).
Respondent's Arguments
- The Scheme is concerned with "travel" not limited to traditional tour operators; a single travel-related service can fall within the Scheme and the Respondent supplies such travel facilities as principal using services of others.
- The on-demand nature, 24/7 availability and ability of customers to specify origin/destination do not exclude the Scheme; the Respondent's services are of a kind commonly provided by tour operators or travel agents.
- The Respondent relied on factual evidence about its operations to show it shared hallmarks of traditional tour operators and that regulatory pre-booking does not distinguish it.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| The Learning Centre (Romford) v Revenue and Customs Commissioners [2020] EWCA Civ 452, [2020] STC 898 |
Principle of interpreting EU provisions by usual meaning, context and purpose. |
Cited as the proper approach to interpret Article 306 PVD and the implementing UK provisions. |
| Case C-163/91 Van Ginkel Waddinxveen BV v Inspecteur der Omzetbelasting, Utrecht [1996] STC 825 |
Rationale for special scheme: travel agents/tour operators frequently provide multiple services; single service (e.g. accommodation) can fall within scheme to avoid complexity. |
Used to explain why single services may fall within Scheme but to anchor that extension to the Scheme's core rationale. |
| Joined Cases C-308/96 and C-94/97 Customs and Excise Commissioners v Madgett & Baldwin [1998] STC 1189 |
Scheme may apply to traders not formally travel agents if they effect identical or comparable transactions; ancillary/in-house supplies excluded. |
Applied to show extension only where transactions are identical/comparable and to emphasise exclusion of ancillary and in-house supplies. |
| Case C-349/96 Card Protection Plan Ltd v Customs and Excise Commissioners [1999] STC 270 |
Single-supply/ancillary-element doctrine: do not artificially split supplies; ancillary services are not independently sufficient. |
Used to support analysis that ancillary elements do not bring a supply within the Scheme. |
| Case C-200/04 Finanzamt Heidelberg v ISt internationale Sprach-und Studienreisen GmbH [2006] STC 52 |
Extension of Scheme to traders providing services identical or comparable to travel agents; travel and/or stay may suffice; purpose and duration irrelevant. |
Relied on to show that Scheme can apply to non-traditional traders where services are comparable, but Court emphasised comparability criterion. |
| Case C-561/04 MyTravel plc v Commissioners of Customs & Excise [2006] 1 CMLR 13 |
Scheme's purpose to adapt VAT rules to travel agent work; technical apportionments may be required where in-house and bought-in elements mix. |
Used to note Scheme's objectives and that apportionment issues may follow where in-house services exist. |
| Case C-128/05 Commission v Austria [2008] STC 2610 |
Special schemes are exceptions to general rules and must be interpreted strictly; apply only to extent necessary to achieve objective. |
Invoked to support narrow application of the Scheme and caution against broad derogations. |
| Case C-31/10 Minerva Kulturreisen GmbH v Finanzamt Freital [2011] STC 532 |
Stand-alone supplies unrelated to travel (e.g. opera tickets) do not fall within Scheme; Scheme concerns services related to travel. |
Applied to limit Scheme to services related to travel and to reinforce that unrelated services are excluded. |
| Case C-220/11 Star Coaches s.r.o v Financni reditelstvi pro hlavni mesto Prahu EU:C:2012:120 |
Transport-only suppliers that provide services solely to travel agents and lack features comparable to travel agents are not within the Scheme. |
Discussed; Court treated Star Coaches as not having features making its services comparable to travel agents, supporting narrow application. |
| Case C-557/11 Maria Kozak v Dyrektor Izby Skarbowej w Lublinie EU:C:2012:672 |
In-house elements of a package are excluded from the Scheme even if essential to package. |
Applied to underline exclusion of in-house services from the Scheme. |
| Case C-189/11 Commission v Kingdom of Spain EU:C:2013:587 |
Scheme seeks to simplify rules and fairly distribute revenue; applicability to supplies to other operators may be appropriate to achieve objectives. |
Used to note that business-to-business supplies can fall within Scheme to avoid distortions and meet Scheme objectives. |
| Case C-552/17 Alpenchalets Resorts GmbH v Finanzamt Munchen Abteilung Korperschaften EU:C:2018:1032, [2019] BVC 3 |
Mere supply of holiday accommodation by a travel agent can fall within Scheme; reaffirms single-supply principle and limits on reduced rates. |
Relied on to confirm that accommodation-only supplies by travel agents fall within Scheme and to explain Star Coaches reasoning. |
| Case C-108/22 Dyrektor Krajowej Informacji Skarbowej v C. sp. z o.o. EU:C:2023:522 |
Confirmed that supply of accommodation by a trader carrying out transactions identical or comparable to travel agents suffices for Scheme application. |
Used to illustrate comparator cases where accommodation-only supplies qualified, emphasising comparability and occasional provision of travel-related assistance. |
| Case C-763/23 Direcţia Generală Regională a Finanţelor Publice Iaşi v S. C. Dragoram Tour SRL EU:C:2024:591 |
Reasoned order stating sole supply of passenger transport bought from third parties by a travel agent falls within Scheme, even if only accompanied by information/advice services. |
Cited as an order consistent with the line of cases supporting that travel-only supplies can fall within Scheme where the supplier is a travel agent. |
Court's Reasoning and Analysis
The Court (Judge Falk, delivering the lead judgment, with Judges Arnold and Birss agreeing) proceeded as follows:
- Started from the Scheme's established rationale: it targets travel agents and tour operators because they "most frequently" provide multiple services, often across territories, making application of normal VAT rules practically difficult (Van Ginkel and subsequent cases).
- Recognised that CJEU authority permits extension of the Scheme to non-travel-agent traders only where they effect "identical or at least comparable" transactions to those of travel agents/tour operators (Madgett & Baldwin, iSt).
- Examined tribunal fact-findings: the FTT had found the Respondent did not fit the ordinary meaning of travel agent/tour operator and the FTT could not be satisfied that travel agents commonly provide on-demand point-to-point rides as supplied by the Respondent.
- The UT and FTT adopted a "high-level" comparability approach; the Court concluded that approach understates the CJEU requirement that comparability be assessed by reference to the rationale for extending the Scheme beyond its core target.
- The Court held that because travel agents and tour operators do not commonly supply on-demand minicab rides and do not compete in that market, the extension of the Scheme to the Respondent was not necessary to achieve the Scheme's objectives, would not prevent distortion of competition and would render the references to travel agents/tour operators in Article 306 redundant.
- The Court analysed relevant CJEU authorities (including Star Coaches, Alpenchalets, Dragoram, iSt, Madgett & Baldwin) and concluded they do not support treating the Respondent's on-demand private hire services as within the Scheme; Star Coaches in particular illustrated that a transport operator lacking features comparable to travel agents is excluded.
- The Court therefore concluded the UT erred in Ground 1 and allowed the Appellant's appeal; because of this disposition, it did not decide Ground 2.
Holding and Implications
HOLDING: The Court allowed the Appellant's appeal and set aside and re-made the decisions below; the Respondent's challenge to the Decision fails.
Implications: The immediate legal effect is that the Respondent cannot apply the Special Scheme for Travel Agents to its on-demand private hire vehicle services in respect of the Decision under appeal. The Court's reasoning emphasises that extension of the Scheme to non-traditional traders requires supplies that are identical or at least comparable to those of travel agents or tour operators; the judgment confines the Scheme's application to cases necessary to achieve its objective and does not purport to create a broader precedent beyond that interpretative clarification.
Additional Procedural and Anonymisation Notes
This summary has anonymised parties, practitioners and judicial personal names in accordance with the instruction provided. All statements reflect only material contained in the provided opinion.
Click here to read the full judgment