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Andrewsaid:
“Garmensaid:
Finally, is there any possibility of us having a meeting to discuss about TOMS - Tour Operators Margin Scheme. soon?
Hi Carla In one of the first London meetings held we discussed the various VAT schemes but TOMs is probably a bit specific for the 'average' member However I work with it for one of main clients so if there is a real demand I can say a few things. Otherwise please feel free to contact me.
Regards
Andrew
Edited at 06 Nov 2012 10:39 PM GMT”
Dear Andrew,
Many thanks for your response. I apologise for the delay in getting back to you, but I have been quite busy.
I agree with you that TOMS is a specialised area in VAT, and therefore might confuse everyone if this is actually discussed in one of the branch meetings.
I will try to give you some scenarios, so perhaps you can comment on them, line by line, as the more I think about this, the more confused I get.
I will start by saying that I think the main purpose of TOMS is to avoid businesses registered in UK to register in other different EU countries because they are operating in those countries. I also know that TOMS is a scheme that calculates the VAT payable to HMRC based on the profit margin, i.e. direct sales less cost of sales.
Thinking of this, I am also wondering whether in this case VAT will be an additional cost to the tour operator, because I am just wondering how this cost passed on to the ultimate user i.e. the traveller, like it happens generally with any ordinary sales?
I hope the length on this email does not put you off answering it and providing me some guidance as I am trying to cover almost every aspect in regards to this, I can think of.
Seller of services – TRAVEL AGENCY - UK Company, registered for VAT purposes in UK
Scenario A1
Customer – UK Resident
Services Provided: Flights from London Gatwick to Manchester, no Accommodation provided
Sales invoice: Zero Rated, TOMS not applied
Purchase invoice: Zero Rated
Scenario A2
Customer – UK Resident
Services Provided: Flights from London Gatwick to Manchester, Accommodation provided
Sales invoice: Is the sales invoice partially zero rated and partially standard rated? The invoice is generated as a package sale, i.e. no breakdown is given on the invoice in regards to the amounts charged to the customer. TOMS not applied
Purchase invoices:
- Flights Cost – Zero Rated
- Accommodation – Standard Rated (Assuming the hotel is VAT Registered)
Scenario B1
Customer – UK Resident
Services Provided: Flights from London Gatwick to Thailand, no Accommodation provided
Sales invoice: Outside of Scope (VAT), VAT not charged i.e. excluded from VAT Return, TOMS not applied (?)
Purchase invoice: Outside of Scope (VAT), VAT not charged i.e. excluded from VAT Return (?)
Scenario B2
Customer – UK Resident
Services Provided: Flights from London Gatwick to Thailand, Accommodation provided
Sales invoice: Outside of Scope (VAT), VAT not charged i.e. excluded from VAT Return, TOMS not applied (?)
Purchase invoices:
- Flights Cost – Outside of Scope (VAT), VAT/TAX not charged i.e. excluded from VAT Return (?)
- Accommodation – Outside of Scope (VAT), VAT/TAX not charged i.e. excluded from VAT Return (?)
Scenario C1
Customer – UK Resident
Services Provided: Flights from London Gatwick to Spain, no Accommodation provided
Sales invoice: Zero Rated, TOMS applied (?)
Purchase invoice: Zero Rated, TOMS applied (?)
Scenario C2
Customer – UK Resident
Services Provided: Flights from London Gatwick to Spain, Accommodation provided
Sales invoice: Zero rated, TOMS applied (?)
Purchase invoices:
- Flights Cost – Zero Rated, TOMS applied (?)
- Accommodation – Zero Rated, TOMS applied (?)
How would the above be affected if the client was not UK Resident?
Thank you
Carla
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