Revenue victory over tourism industry VAT

Freelance journalist
Share this content
2

Travel agents are likely to face increased tax bills on their commission after HMRC won a Court of Appeal case about a £7m VAT bill for hotel accommodation.

The court ruled in favour of HMRC in the case of Secret Hotels (Medhotels), overturning a decision last year by the upper tribunal. Experts say the decision will have a big effect on the travel industry.

Medhotels, previously named ‘Secret Hotels 2’ before it was acquired by Thomas Cook, argued that if it sells accommodation to a traveller through its website or via third party travel agents, the agency commission falls outside the scope of UK VAT under the Tour Operators’ Margin Scheme (TOMS).

Please Login or Register to read the full article

Replies

Please login or register to join the discussion.

TOMS

is a nightmare - clarity is needed

Thanks (0)

but the impact is not good for UK plc..

Looks like they have fallen foul on technicalities, but this should be within TOMS otherwise the impact is not good for UK plc..

'Many travel intermediaries will want to confirm whether their position in the supply chain is one of agent or principal'... or whether to just close their UK operation and run it from some low tax state... after all selling overseas hotel accomodation to people via the web can be done from anywhere.

Many travel intermediaries will want to confirm whether their position in the supply chain is one of agent or principal

Thanks (0)