Purchasing & Expense Management Solutions
for Accommodation, Meetings & Events

Tour Operators Margin Scheme (TOMS)

TOMS is a special VAT accounting scheme applying to certain designated travel supplies such as accommodation and transport that are bought in and sold on by businesses. Under the scheme, businesses are unable to recover VAT charged on their purchases but account for VAT on their supplies only on their margin.

The Tour Operators Margin Scheme which covers the hotel booking and event management industry, contained an opt out clause for business to business supplies. This opt out concession ceased to exist from 1st January 2010.

The HBAA, with consultation and support from BSI Managing Director Trevor Elswood, conducted negotiations with HMRC concerning the removal of the TOMS business to business opt out in late 2009 and early 2010. The negotiations led to HMRC issuing the 'Revenue & Customs Brief 21/10' (see link http://www.hmrc.gov.uk/briefs/vat/brief2110.htm) on the specifics required to avoid TOMS for billback.

BSI moved to disclosed agency billback in accordance with the published brief from March 2010, using agreement reached with HMRC to cover the transition period from 1 January to 28 February 2010. These actions have protected BSI’s clients' VAT reclaim abilities throughout the period of the change.