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Expedia say that they can't give me a VAT invoice

Expedia say that they can't give me a VAT invoice

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One of our employees has booked a hotel room in the UK via Expedia.  I just rang them and asked for a VAT invoice but was told that they cannot provide one as they are an American company.

Surely there must be VAT in the price that the employee paid so how can I reclaim it without a VAT invoice?

Replies (14)

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By cheekychappy
01st Feb 2016 20:41

Google it!

https://www.expedia.co.uk/p/support/general-booking-conditions

 

The reservation of any pre-paid "pay online now" hotel bookings and Expedia Special Fare products and Expedia Packages for destinations within the European Union is covered by the regulations for travel agents and tour operators, as set down in Articles 306-310 of the EU Principal VAT Directive [2006/112/EC]. The Supplier Expedia Travel is located in the United States of America, as a result of which no VAT will be charged on services provided by Expedia Travel.

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By Samantha20
01st Feb 2016 20:48

 

 

Thanks, I saw that, but I assumed it meant just the cost of the service that Expedia provides (ie acting as a middleman).

Surely, they will have a competitive advantage if they don't have to charge any VAT on the actual room just because they are based in the US?

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By WhichTyler
02nd Feb 2016 05:57

More likely...
...they can't recover any vat that the hotel is charging them

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By MDK45
02nd Feb 2016 07:20

Which still means they have an advantage because of the vat differential, no?

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By WhichTyler
02nd Feb 2016 07:42

What differential?
If im right, they buy a room for say £120 (inc. Irrecoverable VAT) and sell it for £125 (and no VAT), making £5 on the way. No effect on consumers, but the it might be better for business customers who can recover the vat to buy direct from the hotel and get the vat back, even if they can't negotiate as low a headline rate as Expedia can

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RLI
By lionofludesch
02nd Feb 2016 08:21

Not quite

MDK45 wrote:
Which still means they have an advantage because of the vat differential, no?

They don't pay VAT on their "commission/charges" but it's nothing to do with the "differential".

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By petersaxton
02nd Feb 2016 09:49

Why?

MDK45 wrote:
Which still means they have an advantage because of the vat differential, no?

Why do you say that?

Others have explained it to you.

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By Melody
02nd Feb 2016 15:49

Tour Operators' Margin Scheme

A UK supplier would be covered by the Tour Operators' Margin Scheme,  provided for in the above mentioned EU directive and explained more fully in VAT Notice 709/5. So the UK operator would also not provide a VAT invoice, but if making a B2B supply should indicate on the invoice that it comes under the TOMS, either explicitly or by reference to the appropriate EU directive or UK legislation).

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By Jean- Ralphio
02nd Feb 2016 16:48

Expedia

It was Expedia that took a case on this which lead to the hotel bill-back provisions. 

Technically they can issue a VAT invoice, but the transaction has to be done slightly differently (I think they itemise their service cost from memory). Whether they actually will or not is another matter.

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By Samantha20
05th Feb 2016 12:59

Thanks for all the replies.

 

I have told our admin person not to use the likes of Expedia and Hotel.com in future but to book directly with the hotel so that we can get a VAT invoice and reclaim the VAT.

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By Sheepy306
05th Feb 2016 13:26

Gross v Net

Samantha20 wrote:

 

I have told our admin person not to use the likes of Expedia and Hotel.com in future but to book directly with the hotel so that we can get a VAT invoice and reclaim the VAT.

I wouldn't get too hung up on claiming the VAT invoice if I were you. Some of the hotels have an eye-watering 'standard' room rate published, presumably they do so because they'll get some walk-in customers last minute who desperately need a room at any price, but also so that they can show on the likes of Expedia etc that it's a special 50%+ off their normal price so everyone thinks that they're getting a bargain.

If the gross price through Expedia is lower than the net price booking directly with the hotel, then it still makes sense to go through Expedia, but it depends whether you can explain this to your 'admin person'.

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By Samantha20
05th Feb 2016 14:35

Yes,

Sheepy306 wrote:

Samantha20 wrote:

 

I have told our admin person not to use the likes of Expedia and Hotel.com in future but to book directly with the hotel so that we can get a VAT invoice and reclaim the VAT.

I wouldn't get too hung up on claiming the VAT invoice if I were you. Some of the hotels have an eye-watering 'standard' room rate published, presumably they do so because they'll get some walk-in customers last minute who desperately need a room at any price, but also so that they can show on the likes of Expedia etc that it's a special 50%+ off their normal price so everyone thinks that they're getting a bargain.

If the gross price through Expedia is lower than the net price booking directly with the hotel, then it still makes sense to go through Expedia, but it depends whether you can explain this to your 'admin person'.

Yes, I actually checked the prices of the hotel in question yesterday both directly and on Expedia and found that the the direct price was 8% cheaper than the Expedia  and that was before deducting the VAT. 

I did also try to explain comparing the net price with the gross price on Expedia to the admin person and she didn't understand it.

 

 

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By Martin Pooley
06th Feb 2016 11:45

Expedia TOMS VAT

Yes, there will be underlying VAT declared by the UK hotel and in practice it is very difficult to get it back in this scenario. It is a good point. 

To analyse the VAT position you need to know whether Expedia is acting as an agent or as a principal. If you refer to their t&c at https://www.expedia.co.uk/p/support/general-booking-conditions you will see that they may well be acting as an agent and in that case the traveller is contracting with the hotel. In that case the traveller could try to get a VAT invoice from the hotel. Best time in my experience is when checking out and paying for extras. Good luck with that one.

However if Expedia are acting as a principal then TOMS probably applies except of course that Expedia have taken care to not be established in any EU member state so they do not pay TOMS. The underlying input tax on the supply by the hotel to an operator is blocked by TOMS contrary to fundamental principles of VAT. The way round this catch 22, for a regular agent interested in helping clients rather than a company like Expedia, is to use the hotel billback scheme set up in 2010 when the ESC allowing B2B operators to opt out of TOMS was withdrawn. See HMRC Brief 21/10 not that it is any use here. 

In practice it may be unclear whether Expedia are acting as agent. See the Med Hotels decision in the Supreme Court on agency and bed banks. The key point is whether the would be agent (Expedia) does have an agency agreement with the hotel. The traveller cannot know one way or the other. What is said on a website may not be borne out by the facts.

The reference to TOMS on the Expedia website provided by an earlier correspondent looks carefully crafted to allow for different scenarios. TOMS is always a good excuse. 

There are wider questions about agency, OTA's, wholesalers & B2B generally which is why TOMS is overdue reform. But do not hold your breath. 

The earlier comment about it possibly being cheaper to use Expedia despite the loss of VAT is a valid point. 

 

 

 

 

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By DoopStar
22nd May 2018 14:13

Good info on VAT and Expedia

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