Value Added Tax

Tour Operators Margin Scheme (TOMS) ― overview

Produced by Tolley
  • 22 Dec 2021 18:46

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Tour Operators Margin Scheme (TOMS) ― overview
  • What is the TOMS?
  • Key issues
  • Related reading

Tour Operators Margin Scheme (TOMS) ― overview

This guidance note provides an overview of the Tour Operators Margin Scheme (TOMS) and links to further guidance on the subject.

For more detailed commentary on the TOMS, see De Voil Indirect Tax Service V3.591–V3.594.

What is the TOMS?

The TOMS is a mandatory VAT accounting scheme which is used by businesses based in the UK which buy in and resell travel-related services such as:

  1. accommodation

  2. passenger transport

  3. car hire

  4. trips

  5. excursions

  6. services of tour guides

SI 1987/1806; Notice 709/5, para 2.9

These kinds of service are sometimes referred as ‘designated travel services’ or ‘margin scheme supplies’.

The UK TOMS is based upon a European-wide scheme of which the UK was a part whilst it was an EU member state. At its origin, the scheme was designed to prevent many travel businesses being required to register across multiple EU member states, although since Brexit UK tour operators need to consider whether they have local VAT registration and compliance obligations in the EU member states where the margin scheme supplies they buy and resell are enjoyed.

The TOMS requires a business to perform a year-end calculation based on figures in its annual accounts. The

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