The 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.
As set out in the brief, HMRC’s previous policy on B2B wholesale supplies has now changed following a recent First Tier Tribunal case. This means that tour operators may opt out of TOMS for these supplies. This change is effective immediately. As a result, HMRC’s VAT Notice 709/5 has also been updated to reflect this new policy.
HMRC has recently updated its guidance in the NETP section of its VAT registration manual. The updated guidance is merely a refresher and does not change existing policy. It includes:
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A general improvement to overall content and language;
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A new page on transfers of a going concern;
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A new page on overseas sellers and online marketplaces;
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Information on the reverse charge and low value consignments of goods; and
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Removal of redundant pages and various references to outdated processes.
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