HMRC has issued RCB 5 (2024) regarding the application of the Tour Operators’ Margin Scheme (TOMS) for business-to-business (B2B) wholesale supplies. The brief explains that businesses have the option to apply TOMS to B2B wholesale supplies. TOMS is a mandatory VAT accounting scheme for businesses involved in certain travel services. Under TOMS, tour operators cannot recover VAT on services they buy but only account for VAT on their profit margin. HMRC’s previous policy on B2B wholesale supplies has changed following a recent First Tier Tribunal case, and now tour operators may opt out of TOMS for these supplies. This change is effective immediately, and HMRC’s VAT Notice 709/5 has been updated to reflect this new policy.
Source rbcvat
See also
