HM Revenue and Customs has confirmed a VAT tribunal will hear an appeal by Thomas Cook-owned bed bank Hotels4u tomorrow (Friday).
The hearing follows Med Hotels’ victory in its seven-year battle with the VAT office earlier this year.
HMRC had claimed that Med Hotels was acting as an operator rather than an agent during a period when it was owned by lastminute.com and therefore owed £7 million VAT under the Tour Operators Margin Scheme (Toms).
However, in March this year the Supreme Court agreed that Med Hotels (now part of Thomas Cook and called SecretHotels2) had been acting as an agent and therefore was not liable for VAT.
Other bed banks operating similar business models to Med Hotels had hoped the ruling would lead to refunds of VAT already paid, but at the time ABTA warned they couldn’t rely on Med Hotels’ victory in their dealings with HMRC.
A spokesman for HMRC confirmed to TravelMole today that Hotels4U had lodged its own appeal, which will be heard tomorrow, but he declined to give further details of the case.
Thomas Cook said: "H4U, like many other companies in the sector, is in discussion with HMRC as to how the Secret Hotels2/Med Hotels VAT case applies to it. Because of this ongoing talks we are not in the position to comment on any further details."
