HMRC lifts threat of higher VAT burden
ABTA has welcomed the decision by the HM Revenue & Customs to ignore a ruling by the European Court of Justice that wholesale travel transactions should fall within the Tour Operators Margin Scheme
Carolyn Watson, ABTA’s head of finance, CRM & Corporate Services said HMRC’s decision to maintain current rules on the operation of TOMS in the UK was "excellent news".
She said many members might have faced "very significant costs" had they been forced to implement changes resulting from the ECJ ruling last September.
"It is also really positive that HMRC has taken on board the potential disruption to these operators of making changes which may yet be reversed or amended when the EU commission eventually review the scheme," she said.
"ABTA will continue to work closely with HMRC and the EU as they look to review their position on how to apply and amend the scheme in the future."
There had been fears that if HMRC adopted the ruling of the European Court, some tour operators might have been forced to close as it could have led to a doubling of their VAT bill.
At the time, ABTA chief executive Mark Tanzer warned that the ruling had potentially significant trading and administrative cost implications.
HMRC will issue a business briefing with details of its decision on Friday.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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