Travel businesses should be aware of a number of potential changes to the VAT treatment of travel supplies as a result of the three measures below:
- UK TOMS reform
- EU TOMS reform
- New platform rules
Following Brexit, the UK was no longer obliged to apply TOMS but it has continued to do so, with the result that only UK packages attract VAT at 20% on the margin. There was an intention to review the UK TOMS position but to date this hasn’t happened. One possible option would be to abolish TOMS in the UK which would mean that the normal place of supply rules would apply. Another option would be to amend the current rules.
The EU TOMS reform was first proposed in 2002 but due to a lack of any unanimous agreement by the Member States, it hasn’t been proposed. However, there is an open consultation until mid October, with new legislation expected to be proposed in late 2026. Issues being considered are including non EU suppliers in the scheme and changes to B2B rules.
As part of the VIDA package of changes, new EU legislation is being introduced which will impact any platforms selling “untaxed” accommodation and/or passenger accommodation.
The main effect is to make the platforms such as AirBnb, the deemed supplier who is liable to pay the VAT in cases where the underlying providers are not doing so (e.g. private owned villas). We understand that the EU is currently preparing detailed guidance on the new rules with the changes expected to come into effect between 2028 and 2030.
Xeinadin’s VAT travel team are available to discuss the potential impact of the new rules on your business.
Get in touch with our VAT specialists directly: Partner Jane Stacey ([email protected]) or Associate Director, Drew Shrimpton (Drew.Shrimpton.xeinadin.com).
