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HMRC confirms there’ll be no VAT on TOMS for outbound operators from January
HMRC has confirmed that VAT charged on holidays through the Tour Operator Margin Scheme on travel outside the UK from 1 January will be zero rated.
ABTA said this has been agreed by the tax office on the assumption of a possible no deal with the EU on TOMS.
HMRC confirmed a new UK version of TOMS will be introduced after the Brexit transition period ends on 31 December, after which TOMS VAT will be charged only on domestic holidays.
Further details are available for ABTA members on its website.
ABTA warns that in the future tour operators might have to register for VAT with individual EU states, but so far there has been no clarity on this. It said its guidance note will be updated as and when it has more information.
ABTA Director of Finance Carolyn Watson said: "The confirmation by HMRC that post Brexit packages within the EU will be zero rated for TOMS is great news for many of our members.
"We were pleased to be able to work closely with HMRC on this important matter and I thank HMRC for its understanding of how serious this issue is for many travel companies and its action to remove this area of uncertainty. This will greatly assist members as they look to rebuild travel with our most important holiday destinations, the majority of which are within the EU."
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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