Published on Tuesday, September 10, 2019

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.

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