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The scheme can affect firms outside the holiday sector
KEY POINTS
- The tour operators’ margin scheme for the travel and tourism sectors can trap other businesses.
- The main differences between normal rules and the margin scheme.
- A case study illustrates the differences and where the VAT liabilities fall.
- Operating as a disclosed agent can mean that the margin scheme rules are not applicable.
- Be aware of different rules where business customers purchase travel services for resale.
The tour operators’ margin scheme (TOMS) is a well-known (and less than popular) compulsory margin accounting scheme for businesses buying in and recharging the cost of travel services.
The scheme is primarily a concern for those in the travel and tourism sectors. What is less well known and apt to cause the occasional trap and unexpected VAT cost is that...
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