Small Fish Big Ocean

Helping specialist tour operators and activity providers with travel ecommerce

I know, what an exciting subject.
Does anybody out there know much about VAT in the travel agency / tour operator world.

We've been doing a little homework and have concluded that as we act as an intermediary (under HMRC's definitions in this document we should charge VAT within our commission to:
- UK tour operators
- EU tour operators
can anybody validate this, I was surprised to see we had to charge VAT to non UK tour operators who were operating in other EU countries?
I am also unclear how the picture changes if the customer is not from the UK. Does this mean no VAT should be charged even if it is for a UK operator?

Any help appreciated. I had given the VAT helpline a call and they had flagged the EU thing up to us, but I don't always trust the accuracy of these big HMRC helpline call centres, I have had conflicting advice from them on previous topics.

Tags: VAT

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Hi Ben,

VAT is a bit of a nightmare to decipher! My only advise is that if you are able to get something in writing from HMRC that is great, and when phoning, you need to request to speak to someone "technical", that deals with travel VAT issues. I managed to get much better clarification of my assumptions from them. I'm sure you know this already but it might help if not. You could try to arrange a meeting with a VAT specialist from HMRC to go through things. Sorry it doesn't answer you question but I hope it helps!
Thanks Ali, good advice, think I will try and get hold of someone technical...
In the mean time through much head scratching I have figured out a solution I am happy with. My understanding is that as an (intermediary) agent you charge VAT to UK operators, but not to EU operators who are registered for VAT. You do need to report these transactions through the EC sales list and the operator reverses charges themselves the VAT. If a European operator is not registered for VAT, then you do need to charge VAT on your invoice. So it becomes important to collect VAT numbers from European operators.
Just for fun, the rules are different if you are selling advertising as opposed to acting as an agent. In which case you don't charge VAT to European operators at all.
The country of the customer doesn't make any odds, the key thing is where the ultimate service is delivered.
Just to re-iterate this is my understanding an needs to be verified.
With TourCMS we charge VAT sales tax to this list (its not quite EU / non EU)

United Kingdom and the Isle of Man
Austria
Belgium
Denmark, except the Faroe Islands and Greenland
Finland
France, including Monaco
Germany, except Busingen and the Isle of Heligoland
Greece
The Republic of Ireland
Italy, except the communes of Livigno and Campione d'Italia and the Italian waters of Lake Lugano
Luxembourg
The Netherlands
Portugal, including the Azores and Madeira
Spain, including the Balearic Islands but excluding Cueta and Melilla
Sweden

Easy eh!
Ben
I read this the other day
http://www.travelweekly.co.uk/Articles/2009/12/03/32531/tour-operat...

Gave me a headache (as have to write software that helps people solve and report on these problems)

Martin Pooley has written a good document on the TOMS bit
http://www.pooley.co.uk/toms_document.htm


Cheers. Alex

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