24 Apr

New ABTA guidance following Medhotels ruling

It’s vitally important that companies understand whether they are acting as an agent or a principal when selling travel services. This can affect the VAT status of your business as well as many other fundamental operating requirements such as insurance, consumer protection and documentation.  Following the recent decision by the Supreme Court on Medhotels, we have put together a revised guidance note which will help you understand the current legal and tax implications of both models and help you to make important decisions for your business. The judgement has had significant tax implications and ABTA met recently with HMRC to discuss these. Whilst they continue to consider the implications of the decision and their own legal interpretations of it, they have endorsed our guidance note, confirming that it provides helpful guidance for ABTA Members in assessing their agent or principal status. This important issue, amongst many others, will be debated at the annual Travel Law Seminar on 7-8 May. You can find full details of the programme and book your place, here on our website.

Earlier in April, ABTA held a free Travel Tax event, in partnership with Travel Partner Deloitte, which was attended by more than 120 Members. Deloitte has prepared a summary of some of the key points discussed, which helps provide further clarification on various other tax positions including the impact of TOMS reform in Europe, VAT on card processing fees and also travel agent funded discounts.

Mark Tanzer, Chief Executive

ABTA Guidance note

Deloitte summary