TOMS and in-house supplies

Produced by Tolley

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

  • TOMS and in-house supplies
  • What are in-house supplies?
  • Coach / rail
  • Air transport
  • Cruises
  • Mixed supplies ― vehicles, aircraft or vessels are used to provide transport both inside and outside the TOMS
  • Determining the direct costs for in-house supplies of transportation services
  • Accommodation
  • Determining the direct costs for in-house supplies of accommodation services
  • Mixed use of accommodation
  • More...

TOMS and in-house supplies

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.

What are in-house supplies?

Tour operators may not always purchase margin scheme supplies from a third party and they may make the supply using their own resources. These are called ‘in-house supplies’ and are defined as:

  1. a supply made from the business’ own resources

  2. items that have been purchased by the business but have been materially altered or further processed so that the eventual supply is substantially different from the original item purchased

VATA 1994, s 53; VATA 1994, Sch 8, Group 8, item 12; SI 1987/1806; SI 1995/2518, reg 14(1)(n); Value Added Tax (Tour Operators) (Amendment) Order 1990, SI 1990/751; Value Added Tax (Tour Operators) (Amendment) Order 1992, SI 1992/3125; Value Added Tax (Tour Operators) (Amendment) Order 1995, SI 1995/1495; Value Added Tax (Tour Operators) (Amendment) Order 2009, SI 2009/3166; HMRC Notice 709/5; De Voil Indirect Tax Service V3.591; 2006/112/EC, Articles 306–310

The following provides an overview of the main VAT treatment of supplies of in-house transportation services.

Coach / rail

Businesses (or a member of the VAT group) making in-house supplies including any of the following goods or services will be viewed as a supply of passenger transportation:

  1. coach / train transport where the tour operator owns or hires the mode of transport

  2. providing a driver

  3. fuel and insurance

  4. arranging repairs and maintenance, etc

HMRC Notice 709/5, para 7.1

It will be viewed as a supply of passenger transportation as the business has pulled together a number of separate elements to supply the transportation services. This type of transportation has not

Popular documents