02 Dec

HMRC confirms VAT Tour Operator Margin Scheme rules post Brexit after talks with ABTA

Following discussions with ABTA HMRC has confirmed that once the transition period ceases on 1 January 2021, the VAT charged on holidays through the Tour Operator Margin Scheme (TOMS) on travel outside of the UK will be zero rated. This will remove an area of uncertainty on a crucial issue for many ABTA Members and has been agreed by HMRC on the assumption of a possible no deal with the EU on TOMS.

In the event of a no deal being reached with the EU on TOMS, a new UK version will be introduced which will require payment of TOMS VAT only on UK holidays but not on package holidays within the EU.

A Guidance Note for ABTA Members has been agreed with HMRC, which provides further information and details in respect of transitional issues, which is available on the Member Zone at https://www.abta.com/vat-tour-operator-margin-scheme-toms-rules-post-brexit

One area of uncertainty remains, that in the longer term there might be a requirement to register for VAT with individual EU states. The ABTA Guidance note will be updated as and when there is more clarity in this area and Members will be informed through

ABTA Today and the trade press if there any other further developments.

Carolyn Watson ABTA Director of Finance and Operations said:

“The confirmation by HMRC that post Brexit packages within the EU will be zero rated for TOMS is great news for many of our Members.

“We were pleased to be able to work closely with HMRC on this important matter and I thank HMRC for its understanding of how serious this issue is for many travel companies and its action to remove this area of uncertainty. This will greatly assist Members as they look to rebuild travel with our most important holiday destinations, the majority of which are within the EU.

“However, I would stress that one area of uncertainty still remains; in the longer term the possible need to register for VAT purposes within individual EU state. We will let Members know when the position on this becomes clearer.”
About ABTA:
ABTA has been a trusted travel brand for 70 years. Our purpose is to help our Members to grow their businesses successfully and sustainably, and to help their customers travel with confidence.

The ABTA brand stands for support, protection and expertise. This means consumers have confidence in ABTA and a strong trust in ABTA Members. These qualities are core to us as they ensure that holidaymakers remain confident in the holiday products that they buy from our Members.

We help our Members and their customers navigate through today's changing travel landscape by raising standards in the industry; offering schemes of financial protection; providing an independent complaints resolution service should something go wrong; giving guidance on issues from sustainability to health and safety and by presenting a united voice to government to ensure the industry and the public get a fair deal.

ABTA has more than 4,300 travel brands in Membership, providing a wide range of leisure and business travel services, with a combined annual UK turnover of £39 billion. For more details about what we do, what being an ABTA Member means and how we help the British public travel with confidence visit www.abta.com.