Commentary

RCB/21/10 Tour Operators' Margin Scheme and the treatment of “hotel billback” transactions

Part V16 Forms and other HMRC material

RCB/21/10 Tour Operators' Margin Scheme and the treatment of “hotel billback” transactions

RCB/21/10 Tour Operators' Margin Scheme and the treatment of “hotel billback” transactions

Revenue & Customs Brief, Issue 21. 21 May 2010

Following changes to the Tour Operators' Margin Scheme (TOMS) from 1 January 2010, this Revenue & Customs Brief sets out details of an agreement with representative bodies of the business travel sector about invoicing for supplies under the arrangement known as “hotel billback”.

TOMS is a special VAT accounting scheme applying to certain designated travel supplies such as accommodation and transport that are bought in and sold on by businesses. Under the scheme, businesses are unable to recover VAT charged on their purchases but account for VAT on their supplies only on their margin. This means that invoices for these supplies cannot show the VAT element, which becomes sticking tax to business customers.

Under the “hotel billback” arrangement, hotel booking agents book accommodation on behalf of their business client. The hotel issues a VAT invoice for the accommodation to the booking agents, who recover the VAT charged and then issue a VAT invoice to the

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial