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Helping businesses navigate through the complex rules that apply to the provision of travel services, including the current review of how the Tour Operators Margin Scheme (TOMS) should apply to non-EU providers.

Travel Services VAT

How VAT applies to the supply of travel services has long been seen as one of the most complex areas of VAT. The reality is that although there are some complex areas of VAT to navigate through, this impression largely comes from a misunderstanding of the rules.

 

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Unravelling the Tour Operators Margin Scheme

The Tour Operators Margin Scheme (TOMS) has been a major source of confusion for travel businesses and this has not been helped by events since the UK left the EU, because there are now two versions, the EU’s and the UK’s version. TOMS is a simplification measure and we can help demystify it.

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UK suppliers of EU travel services

Leaving the EU has provided an unexpected VAT benefit for some UK businesses who supply travel services enjoyed in the EU. These benefits may not last for ever however, as the EU reviews the scope of TOMS. We can keep you abreast of developments and help you make the most of current opportunities.

 

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Case Study

VAT & Travel Services

Unravelling the Tour Operators Margin Scheme

Small businesses can be subject to TOMS

Intro

Our client, a provider of guided walks and tours, sought our guidance on determining the applicability of the Tour Operators Margin Scheme (TOMS) to their services.

The Issue

They were approaching the VAT registration threshold and were keen to ensure they had a solid understanding right from the beginning.

How we solved it

We reviewed the various packages provided by the client and advised them which were and weren’t subject to TOMS. We also advised the client how to account for VAT under each package, ensuring they could set up their system to capture the information required.

The outcome

Our client and their accountant were now ready to register for VAT with a detailed plan of how to deal with the VAT accounting.  

UK suppliers of EU travel services

UK travel business in VAT limbo

Intro

An accountant recommended our services to a travel business client. They were uncertain about how to navigate the Tour Operators Margin Scheme (TOMS).

The Issue

They wanted to clarify the TOMS application process before proceeding with their VAT registration. TOMS is a much-misunderstood VAT scheme and strikes fear into many an accountant. 

How we solved it

We reviewed their client’s activities and plans and advised that because the UK was no longer in the EU, they were temporarily outside the scope of TOMS because the EU Commission had still not introduced EU VAT legislation that brought non-EU suppliers within the scope of EU TOMS.

The Outcome

The client was not liable to register for UK VAT and until the EU brings in the revised EU TOMS legislation, they are not likely to be liable to apply EU TOMS VAT either.

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