24 Jan

VAT TOMS in a no-deal scenario

Those Members accounting for VAT under the Tour Operator Margin Scheme (TOMS) will be interested to know that this week HM Treasury laid before parliament a Statutory Instrument (SI) which sets out the position for TOMS in the case of a no-deal Brexit. In summary they have confirmed that TOMS will continue to operate in the UK and that only UK consumed travel services will be subject to UK TOMS. This means that non-UK travel services supplied by UK tour operators will be zero-rated under TOMS. In effect there will be no more UK VAT on EU holidays and travel services.

This is good news for Members in that there will not be double taxation, which we welcome and which ABTA has lobbied hard for over the past two years. However, it’s unclear what approach each Member State will take, and in the absence of an established EU-wide mechanism for tax collection, Members should seek independent tax advice from their own experts on the position of each EU state in which they plan to operate. We will also be reviewing in more depth the implications of this SI, and will be issuing further guidance in due course.