HMRC has issued a correction concerning an error introduced into VAT Notice 709/5 on the tour operators margin scheme (TOMS), following changes to the VAT treatment of retained payments and deposits from 1 March 2019.
While the March update to the notice stated that tour operators should include all forfeited deposits and cancellation fees in their margin scheme calculations, TOMS in fact only requires tour operators to account for such payments where they exceed 20% of the full sale price. HMRC has corrected VAT Notice 709/5 (para 6.1) and invites claims from traders who have overpaid VAT since 1 March as a result of relying on the incorrect guidance.
HMRC has issued a correction concerning an error introduced into VAT Notice 709/5 on the tour operators margin scheme (TOMS), following changes to the VAT treatment of retained payments and deposits from 1 March 2019.
While the March update to the notice stated that tour operators should include all forfeited deposits and cancellation fees in their margin scheme calculations, TOMS in fact only requires tour operators to account for such payments where they exceed 20% of the full sale price. HMRC has corrected VAT Notice 709/5 (para 6.1) and invites claims from traders who have overpaid VAT since 1 March as a result of relying on the incorrect guidance.
