Tour Operator VAT threshold and TOMS confused!

My client has a small business packaging together history tours in the UK

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My client works alone organising history tours around the UK. She is a limited company. She books everything directly with hotels, historical buildings, tour guides, speakers, entertainment etc then sells this as a package to clients. This year her gross turnover will be £100k but her profit from that is only around £20k. She has just approached me to be her bookkeeper and I'm trying to understand TOMS and how it will affect her. As her gross turnover is over £85k does she need to register for VAT for non tour operator costs such as expenses. These will be minimal amounts though. Is there a threshold for TOMS too? As her margin is likely to be small does she wait until that reaches a threshold? Thank you in advance for any help you're able to give.

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chips_at_mattersey
By Les Howard
03rd Jul 2018 17:58

The value of TOMS supplies is the margin. See para 4.1 of the HMRC Notice: https://www.gov.uk/guidance/tour-operators-margin-scheme-for-vat-notice-...
This follows art 7 of SI 1987/1806.
Do check that you understand the definitions of the various supplies.

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By carnmores
03rd Jul 2018 20:23

No need to register Les has it spot on

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By smartbookkeeping777
03rd Jul 2018 21:38

Great, thank you both.

Can I just clarify then, am I correct in thinking as her overall turnover is above £85k she still doesn’t have to register for VAT as her margin is below that threshold.

Thank you again for your help.

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Replying to smartbookkeeping777:
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By carnmores
03rd Jul 2018 22:17

CORRECT

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