Commentary

V16.828 Tour operators' margin scheme—practical implementation of the trader to trader (wholesale) option following the changes which came into effect on 1 January 1996

Part V16 Forms and other HMRC material

V16.828 Tour operators' margin scheme—practical implementation of the trader to trader (wholesale) option following the changes which came into effect on 1 January 1996

V16.828 Tour operators' margin scheme—practical implementation of the trader to trader (wholesale) option following the changes which came into effect on 1 January 1996

VAT Information Sheet 1/97, May 1997

This information sheet clarifies the requirements and practical implementation of the changes for traders in relation to the trader to trader (wholesale) transactions detailed in Press Notice No 50/95 [Division V16.3].

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” (Part V8) and Press Notice No 50/95.

The airline charter option is covered in Information Sheet 3/96 and the agency option is covered in Information Sheet 4/96.

The information is presented in a question and answer format and supplies some examples of the effects on the VAT payable. It contains an algebraic formula which traders may use if they so wish.

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

Transport Company Scheme

A Background

1 What is the transport company scheme?

From 1 January 1996 the sales of transport, accommodation etc between taxable persons for the purpose of their businesses are no longer designated travel services and will therefore fall outside the tour operators' margin scheme (TOMS). Thus it will only be when the transport, accommodation etc is provided to the traveller that these supplies will be treated as designated travel services and will fall within TOMS.

On the basis of the above, tour

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