VAT and the Sonder appeal

On 14 January 2025 the Upper Tribunal (UT) released its decision in the case of CRC v Sonder Europe Ltd [2025] UKUT 14 (TCC). It found in favour of HMRC overturning the decision of the First-tier Tribunal (FTT). The UT decision exposes how the tour operators’ margin scheme (TOMS) legislation is not well formed. Clarity on the rules of TOMS is important for travel agents and for any supplier of accommodation passenger transport meals events and so on.

In search of this clarity for the travel industry at large and any other TOMS-suppliers it is hoped that the taxpayer further appeals this decision.

Turbulence in TOMS

The UK VAT legislation was written to implement the requirements and meaning of the Principal VAT Directive 2006/112/EC (PVD). The UK legislation includes additional wording and HMRC applies this wording narrowly.

The question is whether the...