Travel VAT and the Tour Operators’ Margin Scheme (TOMS)
A business’ VAT position can often be key to its profitability. In the travel industry, the VAT rules can be particularly complex and frequently changing, often meaning it is difficult to keep track, and to ensure VAT efficiency.
The Tour Operators’ Margin Scheme (TOMS) is a VAT accounting scheme for businesses that buy and resell travel and related services. Originally designed to simplify VAT for UK businesses, TOMS now applies differently after the UK’s departure from the EU in January 2021.
In the UK, TOMS still applies for domestic travel, with VAT paid only on UK holiday and travel margins. For travel outside the UK and EU, the margin is zero-rated. Discussions within the EU continue on whether non-EU travel businesses should register for VAT in the countries they operate in.
Our travel team has extensive experience with TOMS rules and can help optimise your VAT situation, whether within TOMS or outside of it, to benefit your travel business.
Other travel VAT issues
We understand that businesses in the travel industry have concerns that extend beyond just TOMS (Tour Operators’ Margin Scheme). With extensive experience advising on various common industry issues, such as the choice between agency and principal models, input VAT recovery, VAT place of supply rules, agency billback, and VAT on credit card fees, we are well-equipped to address the multifaceted needs of our clients.
Our in-house VAT specialists bring their expertise in VAT and TOMS, working in tandem with our dedicated Accounts & Audit team, which oversees TOMS reporting for more than 200 travel businesses.
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Our services for travel and tourism businesses
Accounts & Audit
You work in a highly regulated industry which is always in the spotlight. A specialist sector requires specialist expertise and knowledge. When it comes to understanding the Travel Industry, our Accounts and Audit team is second to none. In fact, our clients call them the A Team as their advice and added value input are exceptional.
Our Travel Tax Team works closely with you and our Travel Accounts & Audit Team to ensure we highlight opportunities many travel businesses overlook and pitfalls to avoid. These range from rewarding and incentivising your team with the right Employee Share Scheme to significant R&D Tax Relief refunds which we spearhead in the Travel Industry.
Our corporate finance experts are good people to have in your corner for any business acquisition, funding requirement, or management buyout. Our hugely experienced heavy hitters will support you every step of the journey, and keep you one step ahead of the competition, so you can embark on suitable deals with confidence.
We run a series of events throughout the year for our clients and guests, in addition to delivering many for leading trade associations, including ABTA, AITO, ETOA, BETA, UKinbound, ABTOI, Advantage Travel Partnership and the Bespoke Travel Group.
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