On 18 April 2024, HMRC issued a statement on the UK’s policy for the Tour Operator’s Margin Scheme (TOMS) and how it affects UK businesses that sell relevant travel supplies to customers who resell those supplies, referred to as “wholesale” supplies.
HMRC’s Brief 5/2024 has replaced with immediate effect the previously issued guidance from 2014, Brief 5/2014, and section 3 of the current TOMS Public Notice is also updated.
Previously, HMRC has taken the view that wholesale supplies made as principal or undisclosed agent of relevant travel services such as accommodation and passenger transport should by default be reported for VAT using normal VAT rules, but by concession a supplier could opt to report those supplies using TOMS instead. From 18 April, HMRC has announced that now it sees these supplies as TOMS supplies by default but that a supplier can opt to use normal VAT rules if it prefers.
To summarise, the announcement is technical and clarifies HMRC’s position on the rules but from a practical point of view, nothing has changed on the VAT treatment for UK wholesale suppliers of travel services.
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