RCB/27/09 Changes to the Tour Operators' Margin Scheme

Part V16 Forms and other HMRC material

RCB/27/09 Changes to the Tour Operators' Margin Scheme

RCB/27/09 Changes to the Tour Operators' Margin Scheme

Revenue and Customs Brief, Issue 27. 8 April 2009


This brief publicises changes to be made to the Tour Operators' Margin Scheme (TOMS) in order to comply fully with EU law. The changes are to take effect from 1 January 2010.

Brief outline of the special scheme for travel agents

The special scheme for travel agents is a VAT accounting scheme and simplification measure for tour operators and other travel service providers based in the EU. Under the normal VAT rules, those businesses buying and selling various elements of their travel packages in different member states would be liable to register and account for VAT in each of the member states concerned. The special scheme enables tour operators to register in just the member state in which they are established, rather than in all member states where they provide travel services, thus significantly reducing their administrative burdens. Under the scheme, the supply of a travel package is treated as a single supply taxable at the standard rate of VAT, and operators account for VAT on their profit margin in the member state where they are established, but are prevented from recovering input tax incurred on scheme purchases.


The European Commission has written to the UK raising concerns about aspects of the UK's operation of the TOMS and opining that the UK arrangements in respect of these issues were not fully compatible with the VAT Directive (2006/112 EC).

Following legal advice, the UK has accepted that aspects of

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