UT/2024/000008 - [2025] UKUT 00100 (TCC)

Ms Mitrophanous KC also took issue with various aspects of the FTT’s approach to the question of comparability in its alternative rationale for its conclusion (FTT [108]-[110], and [113]).

The first of these relates to the mode of transport provided. In its decision, the FTT (at FTT [108]) concluded that there is “no reason why… a taxi ride… cannot be regarded as a service of a kind commonly provided by tour operators or travel agents”. In support of its conclusion, the FTT relied on the opinion of the Advocate General in Madgett (“Madgett AG”), where the Advocate General makes a distinction between a hotelier (i) “arranging a taxi service for journeys to a nearby station or airport” (Madgett AG [34] and [37]) – which would be outside the scheme as it would be ancillary to its activity as a hotelier – and (ii) providing other services outside the scope of “tasks traditionally entrusted to hotels”, such as tourist excursions (Madgett AG [39]) - which may fall within the scheme.

Ms Mitrophanous KC criticized the FTT’s reliance on the Advocate General’s opinion in Madgett on the grounds that (i) the reference to taxi rides in the Advocate General’s opinion should not be regarded as confirmation that the provision of transport by taxi will always fall within the scheme and (ii) it was incorrect to draw the inference that local taxi rides could fall within the scheme from a case which was not concerned with transport by taxi at all.

We do not share Ms Mitrophanous KC’s concerns. At FTT [108], the FTT was simply acknowledging the possibility that the supply of a taxi ride may be capable of falling within the scheme. We agree with the FTT that the view of the Advocate General (at Madgett AG [34]and [37]) that a taxi service provided to a customer by a hotelier for a journey to a nearby station or airport would be ancillary to the hotelier’s other activities supports the FTT’s view. The concept of “ancillary” activities in this context is an exception from bought-in travel services that would otherwise fall within the scheme (see Madgett [24]-[25], iSt [34]). It must contemplate the possibility that the provision of a bought-in taxi ride might otherwise be a travel service within the scheme.

As regards the other issues that relate to comparability, Ms Mitrophanous KC also submitted that the FTT fell into error by ignoring relevant characteristics of the services that distinguished the supplies made by Bolt from those typically made by travel agents and tour operators – primarily the fact that Bolt provides rides to and from places that tour operators do not typically serve and that Bolt’s service operates on-demand and 24 hours a day. In the first case, the FTT equated the question of the underlying nature of the journeys provided by Bolt with the question of the purpose of the journey, which was found in iSt to be an irrelevant consideration (FTT [109]). The two were not the same. It was also, on Ms Mitrophanous KC’s argument, incorrect for the FTT to treat the on-demand nature of Bolt's supplies as an “arbitrary” criterion and so not a means of distinguishing these supplies from those commonly made by travel agents and tour operators (FTT [110]). The point was that the nature of the underlying service itself was not comparable with those commonly provided by travel agents and tour operators.

Ms Mitrophanous KC also submitted that, even if a proportion of Bolt’s supplies – for example transfers to transport hubs (see the FTT’s reference at FTT (109)) – might be regarded as comparable with those commonly provided by travel agents and tour operators, that proportion was a small minority. A minority of supplies that may fall within the special scheme could not affect the treatment of the vast majority of supplies that fell outside the scheme (Minerva [22]-[23]).

On these issues, and on the separate issue to which we refer below concerning the packaging of supplies, the argument before us descended into disputes between the parties as to the admissibility and relevance of evidence on the nature of the supplies made by some travel agents and tour operators and the proportion of journeys provided by Bolt or travel agents that would fall into particular categories - for example, the extent to which travel agents might provide taxi or chauffeur services for stand-alone journeys rather than part of a package or itinerary, the proportion of longer distance journeys undertaken by Bolt’s customers, and the proportion of transfers to and from transport hubs provided by Bolt. It was in this context, that the dispute concerning Mr Ryan’s evidence to which we referred at [20]-[28] above arose.

As we have mentioned, the dispute concerned an exhibit to Mr Ryan’s witness statement (JR28) showing that a number of travel agents (Corporate Travel Services, Baldwins Travel, Hays Travel) provide cars, transfers, business taxis, and chauffeur services. We agree with the FTT’s concern, expressed in the transcript passages to which we referred, that it is not possible to know how frequent this is. That having been said, we think that the very fact that it would be difficult ever to know, without a lot of work, the percentage or amount of business of this kind among the trade is a good argument for a quantitative approach not being the right one, a point also adverted to in the course of argument in the FTT. It may also be difficult to establish whether any particular activity of this kind is provided as principal or not.

We decided not to exclude JR28, but in any event, whether or not JR28 is excluded is not as important a dispute as the time devoted to it at the hearing before us might suggest. The reason is that in the last two sentences of FTT [109], the FTT said that airport transfers by taxi or PHV are “routinely” provided by travel agents (and airlines) and (last sentence) that those transfers are “usually” provided as part of a package. This finding, which HMRC does not dispute and indeed relies on, clearly means that sometimes such transfer provisions are not part of a package.

Ms Mitrophanous KC accepted in the course of argument before us that there was no concrete evidence bearing on whether such transfers are more often as part of a package and that the FTT’s conclusion as to the relative frequency must have been based on a form of judicial notice.

We did not hear any detailed argument on how far judicial notice extends; it was not part of the argument below nor was it covered in the FTT Decision, and its scope is not part of either side’s grounds on this appeal. However, we have already said that detailed quantitative inquiries are not the right approach and if judges and tribunals deciding the application of the scheme to particular cases are to rely on their own appreciation of the travel business then it must necessarily be at a broad level. They will not have a concrete idea of what proportion of services are X rather than Y, or whether travel agents offer precisely A, B and C all together and how often. We note that none of the CJEU cases cited to us involves any such detailed analysis. They proceed on the basis and at the level that travel agents provide flights, or hotel rooms or the like, matters which are notorious and obvious and might well be the subject of judicial notice.

The significance to Bolt’s argument of the parts of JR28 to which we have referred was partly that they spell out that the transfers might be stand-alone and not part of a full itinerary (for example on the first page under “Chauffeur Services”). But that this happens at least sometimes was part of the FTT’s finding at FTT [109] that is not challenged by HMRC. So we think this was all something of a side show. We note that JR28 also gives some support for travel agents providing, in a similar way, cross-town transport or transfers for train journeys. We do not think that FTT [109] was intended to reject this, it is just that it happened to be focusing on airport transfers.

A somewhat related point arose in relation to which services compete with which others. One of Ms Mitrophanous KC’s arguments was that on-demand journeys are not the same as, or comparable to, scheduled taxi services because they do not compete with each other. But the FTT (at FTT [92]) made findings accepting that Bolt does compete with other transport forms, as well as with other PHV service providers. Speaking for ourselves, and assuming that some form of judicial notice (or perhaps in this case, common sense) is appropriate, we think it is more likely than not that some consumers do make a choice between a scheduled service and an on-demand service, perhaps on the basis that the former is more expensive but more certain and the latter is cheaper but involves the possibility that the taxi will not come for 20 minutes. As with the point about quantitative proportions, investigating competition and substitutability can be a complex, difficult and resource-intensive task and we do not think it can be the right approach, which again militates in favour of assessing comparability at a high-level.

As regards the “on-demand” nature of Bolt’s supplies for reasons similar to those of the FTT, we are not satisfied that this can be a distinguishing feature. All the supplies made by Bolt are made through the reservation system. We are not satisfied that it makes any difference to the VAT treatment as to whether those journeys are booked 1 week, 1 day or 1 minute in advance.

In summary, therefore, on the issues falling within Grounds 1a, 2 and 2a, we find no error in the FTT’s approach. The FTT was entitled to reach the conclusions that it did on the evidence before it.