EC 261/2004 simply provides for a duty of care. If that includes a hotel, then it includes getting to and from the hotel. "Reasonableness" is always the key. At that time of night, a taxi is reasonable and thus the standard taxi fare is reasonable. The return is another question and the question is whether the taxi fare exceeds 4 train tickets by some measurable amount.
I would send a clear and concise note to BA which is devoid of anything other than the facts, thus allowing it to be readily attached to either an MCOL or CEDR complaint. Separate out the two rides, explain why each one is reasonable and then proceed.
Although not necessarily relevant to outcome, what was the fare and what is it that BA considers its cap?