Commentary

V16.824 Tour operators' margin scheme—practical implementation of the agency option following the changes which came into effect on 1 January 1996

Part V16 Forms and other HMRC material

V16.824 Tour operators' margin scheme—practical implementation of the agency option following the changes which came into effect on 1 January 1996

V16.824 Tour operators' margin scheme—practical implementation of the agency option following the changes which came into effect on 1 January 1996

VAT Information Sheet 4/96, July 1996

This information sheet clarifies the requirements and practical implementation of the changes for traders in relation to the agency option detailed in Press Notice No 50/95.

It has been produced in co-operation with the Association of British Travel Agents (ABTA) and accountants Price Waterhouse. It is to be read in conjunction with Notice No 709/5 “Tour operators' margin scheme” and Press Notice No 50/95.

The information is presented in a question and answer format and supplies some examples of the effects on the VAT payable. The trader to trader (wholesale) option is covered in Information Sheet 2/96 and the airline charter option is covered in Information Sheet 3/96.

This information was originally included in Briefing Note VAT5A No 1 issued to all local VAT offices in February 1996.

Agency scheme question and answers

A Background

1 What is the agency scheme?

At present tour operators buy in supplies of transport services from third parties and resell them either singly or as a package as a principal to the final customer. When a tour operator supplies transport services as a principal these are regarded as designated travel services which fall within TOMS. However, if the tour operator were to act as an agent in respect of the transport, then the supply of the transport services will be directly from the transport provider to the final customer. As the supply of the transport

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