In HMRC v Secret Hotels2 Ltd (CA – 3 December) a company (S) operated a website through which it marketed hotel accommodation outside the UK. About 94% of its sales were to travel agents and about 6% to holidaymakers. It failed to account for VAT on its supplies. HMRC issued assessments charging output tax of more than £7 000 000. S appealed contending that it was acting as an agent for the owners of the hotels and should not be required to account for UK VAT. The FTT rejected this contention and dismissed the appeal holding that S was acting as an independent principal and ‘was not simply supplying agency services to the hotels but was itself supplying the holiday’. Accordingly S was required to account for VAT under the tour operators’ margin scheme. The...
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In HMRC v Secret Hotels2 Ltd (CA – 3 December) a company (S) operated a website through which it marketed hotel accommodation outside the UK. About 94% of its sales were to travel agents and about 6% to holidaymakers. It failed to account for VAT on its supplies. HMRC issued assessments charging output tax of more than £7 000 000. S appealed contending that it was acting as an agent for the owners of the hotels and should not be required to account for UK VAT. The FTT rejected this contention and dismissed the appeal holding that S was acting as an independent principal and ‘was not simply supplying agency services to the hotels but was itself supplying the holiday’. Accordingly S was required to account for VAT under the tour operators’ margin scheme. The...
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