Tour Operators Margin Scheme (TOMS) ― overview

Produced by Tolley

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
  • Temporary reduced rate and TOMS
  • What is TOMS?
  • What supplies are outside the scope of UK TOMS?
  • How does TOMS operate?
  • What are margin scheme supplies?
  • How are passenger perks treated?
  • What is the treatment of in-house supplies?
  • What is the treatment of agency supplies?
  • How are overseas establishments treated?
  • More...

Tour Operators Margin Scheme (TOMS) ― overview

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note provides an overview of the main aspects of the Tour Operators Margin Scheme (TOMS). It should be read in conjunction with the Operating TOMS, TOMS and in-house supplies, TOMS calculations and Travel agents guidance notes.

Temporary reduced rate and TOMS

This note has not been updated to reflect the temporary reduced rate.

Please see the Hospitality industry ― temporary reduced rate from 15 July 2020 to 31 March 2021 guidance note for details of the temporary reduced rate for supplies made by the hospitality sector from 15 July 2020 to 31 March 2021 and its impact on the TOMS.

What is TOMS?

TOMS is a specific VAT accounting scheme that is intended to be used by businesses that buy-in and re-sell travel, accommodation and certain other connected services either as a principal or undisclosed agent.

Businesses using TOMS are able to take advantage of a VAT simplification that will, in many instances, alleviate the requirement for the business to VAT register in other EU member states if they supply these types of services within other EU member states. If the business provides goods / services that are not TOMS supplies, it may be required to VAT register in the EU member state where the goods / services are supplied. The precise VAT treatment will depend on the nature of the goods / services supplies. Further details can be found in the International Transactions topic.

Businesses who make the types of supplies listed below must use

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