- TOMS (Tour Operators’ Margin Scheme) is a decades-old but often misunderstood area of VAT
- Recent court cases have highlighted ambiguities in the application of TOMS
- Brexit and recent cases have renewed focus on TOMS and its benefits for businesses buying and selling accommodation, transportation, or excursions
- In a case involving Sondar Europe Ltd, TOMS represented a significant tax saving for the taxpayer
- HMRC argued against TOMS applying in the case, but the Tribunal found in favor of the taxpayer
- If TOMS ultimately applies, VAT would only need to be declared on the profit margin, potentially saving taxpayers considerable sums
- In another case, a small organization running music retreats found that TOMS applied to its supplies, helping them avoid a VAT registration breach
- Increasing number of cases are being referred from firms where TOMS comes into play, sometimes helpful and other times a costly miss.
Source: thevatteam.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
