TOMS ― step by step guide to completing the calculations

Produced by Tolley
TOMS ― step by step guide to completing the calculations

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

  • TOMS ― step by step guide to completing the calculations
  • Market value calculation (annual adjustment)
  • Cost-based calculation (annual adjustment)
  • Accounting for VAT on the provisional value of margin scheme supplies
  • Simplified end-of-year calculation (annual adjustment)
  • Accounting for VAT on the provisional value of margin scheme supplies when the simplified calculation applies (all supplies standard-rated)

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.

These calculations have been extracted from HMRC Notice 709/5, sections 8–12.

Please note that a temporary reduced rate has been introduced for certain supplies in the hospitality industry that will impact TOMS and additional steps are required to the calculation, see the TOMS calculations ― reduced rate supplies (15 July 2020 to 12 January 2021) guidance note for more information. The calculations below do not include the additional steps that are required as a result of the temporary reduced rate.

These calculations should be used in conjunction with the TOMS calculations guidance note.

Market value calculation (annual adjustment)

The following table provides details of the steps that need to be taken when undertaking a market value end of year annual adjustment.

Only use this calculation if packages or parts of packages are being apportioned by the market value of the in-house element of the package. On completion of all the steps M1–M5, the steps in the cost-based calculation below must be followed, taking forward the figures from this section as instructed.

StepAction required
Calculate the value of sales of margin scheme packages
M1Total the VAT-inclusive selling prices of all your in-house and margin scheme packages supplied during the financial year including any that are not ‘market value’ packages
Working out the market value
M2Total the VAT-inclusive market value of the standard-rated in-house supplies at M1: carry forward this figure to step 21 of the cost-based calculation below
M3Total the VAT-inclusive market value of the zero-rated and outside the scope in-house travel services at

Popular documents