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Business-to-business (B2B) wholesale supplies are within the scope of the tour operators’ margin scheme (TOMS) and by concession tour operators may opt B2B wholesale supplies out of the TOMS, HMRC has confirmed.
It says this is a ‘technical change’ to the legal interpretation and will not affect tour operators’ ability to choose whether to apply the TOMS to B2B wholesale supplies.
There is no change to the treatment of the TOMS supplies for consumption by business customers.
Revenue and Customs Brief 5/2014 has been withdrawn and VAT Notice 709/5 Tour Operators Margin Scheme has been amended.
TOMS is a mandatory VAT accounting scheme for businesses which buy in and sell certain travel services. Under TOMS, tour operators cannot recover any VAT on the services they buy in, but only account for VAT on their profit margin.
