Operators to get tax refunds after HMRC admits error
Dozens of UK tour operators could be paying thousands of pounds less tax – and qualifying for refunds – after ABTA successfully challenged an HMRC policy.
HMRC has agreed that forfeited customer deposits and other cancellation fees retained by operators should not be subject to VAT, provided they are using departure date as the tax point.
It comes after ABTA highlighted an error in HMRC’s policy relating to inclusion of cancellation fees in Tour Operators Margin Scheme (TOMS) calculations.
"Thankfully the error in policy has now been updated and businesses will be paying less tax," said Carolyn Watson, ABTA’s director of finance and resources.
Any businesses that have paid too much VAT since March 1 2019 can claim a refund by visiting and reviewing the new policy paper.
Members can also attend ABTA’s seminar on ‘A Complete Guide to VAT and TOMS in Travel’ September 19 and a Travel Tax Briefing event on October 23.
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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