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Tour Operators Margin Scheme VAT Made Simple
Accommodation Providers, Maximise Savings with TOMS VAT Scheme
Is VAT weighing down your accommodation business? Our specialist Tour Operators Margin Scheme VAT services help accommodation providers streamline their tax obligations and reduce VAT burdens while ensuring full compliance with HMRC regulations. Learn how TOMS VAT can significantly benefit your business by simplifying the VAT process and maximising savings.
Tour Operators Margin Scheme: The Smart Way to Save
Do You Qualify for TOMS VAT?
The Tour Operators' Margin Scheme (TOMS) is a VAT scheme for businesses in the travel and tourism sector, allowing them to pay VAT only on their margin. The margin is the difference between the selling price of a travel package and the cost of services purchased to provide that package. This simplifies VAT calculations and reduces VAT liability for qualifying businesses.
Applicable Businesses
TOMS VAT applies to tour operators, travel agents, accommodation providers, transport services (like car hire and flights), and event organisers who sell travel packages.
Exclusions from TOMS
Property investors and businesses focused on real estate are excluded from TOMS as they do not resell travel-related services.
VAT Calculation Basis
Under TOMS, VAT is calculated only on the margin, which is the difference between the selling price of a travel package and the cost of services purchased to provide it.
Tours Operators Margin Scheme VAT Calculation
How Do You Calculate TOMS VAT?
To calculate Tour Operators Margin Scheme VAT, you determine the margin, which is the difference between the total price charged to the customer for a package and the cost of the services purchased to provide that package. VAT is applied only to the margin, not the full price.
For example, if you sell a package for £1,000 and the cost of services like accommodation or transport is £700, the margin is £300. VAT at the standard rate of 20% is then applied to this margin, resulting in £60 VAT payable. This method simplifies VAT accounting and typically reduces the VAT liability compared to the standard VAT method.
To fulfil legal obligation
To avoid penalties
Seek Expert Assistance
Partner with Experts for Your TOMS VAT Needs
Navigating TOMS scheme vat can be quite challenging. It requires accurate calculation of the VAT on the margin as well as an understanding of the rules around reclaiming VAT on purchases. Businesses need to carefully track and account for VAT, especially when working with multiple suppliers or cross-border services. Incorrect application of the scheme can lead to penalties, and staying up to date with regulations is essential for compliance.
Working with a specialist can:
Helpful Resources for TOMS VAT
We’ve Got a Whole Book for You
Get complete guidance on TOMS VAT and learn the ways it can help you save money with our free eBook prepared by a team of industry professionals who know exactly what you need.
Master Tour Operators Margin Scheme (TOMS) VAT with UKPA
Why UK Property Accountants is the Ideal Partner for TOMS VAT?
Handling Tour Operators Margin Scheme (TOMS) VAT can be daunting, but with UK Property Accountants by your side, you can rest assured that the process will be super simple. Our team has helped countless businesses make the most out of TOMS scheme VAT, streamlining their financial operations and ensuring compliance with HMRC regulations.
We navigate the the intricacies of TOMS VAT so that you avoid penalties.
Every business is unique, so we tailor our approach to fit your specific needs.
Our experts help unlock savings by taking advantage of available tax allowances and exemptions.
Our process
How We Work
Our work is centred around efficiency, collaboration, and delivering exceptional results to our clients.
Initial Discovery Call
We start with a straightforward process. Answer a few simple questions to help us understand your circumstances. It’s hassle-free, quick and designed to save you time.
Data Gathering and Analysis
Once we have the details, our team of experienced accountants gets to work. You can trust us to manage the complexities and ensure everything is accurate and compliant.
Thorough Review & Timely Submission
We conduct a meticulous review to ensure accuracy, compliance, and completeness in every submission. Our streamlined process guarantees timely submissions, so you never miss a deadline.
Ongoing Support
Our commitment extends beyond accounting and tax advisory work. We provide ongoing support, including tax planning and addressing accounting queries throughout the year.
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FAQs
General queries by our clients regarding TOMS VAT are answered here.
Under the Tour Operators' Margin Scheme (TOMS), businesses cannot reclaim. VAT is only applied to the margin—the difference between the total sales price of the package and the cost of the services purchased.
NRL forms are relevant only to non-resident landlords (NRLs) in the UK. You are considered a non-resident landlord if you live outside the UK for more than six months. If you are a permanent UK resident, you do not need to declare NRL forms unless you spend more than six months outside the UK.
For your Self Assessment Tax Return, you must declare all income earned during the tax year.
- UK Residents - Declare income from worldwide sources.
- Non-UK Residents - Declare only UK income.
The specific documents required depend on your income sources.
No, since April 2020, landlords cannot deduct full mortgage interest as an expense. Instead, a basic rate relief is provided. The relief is calculated at 20% of the lower of:
- Finance costs (costs not deducted from rental income in the current year)
- Property business profits (profits after accounting for carried-forward losses)
- Adjusted total income (total income minus the personal allowance)
Yes, you can use your payslips if you do not have a P60 or P45. The P60 reflects your total annual employment income and the P45 is issued when you leave a company mid-year. If neither is available, the amount in your payslips can be submitted, and the income shown will be declared in your tax return.
As specialised accountants, we provide comprehensive support for your Self Assessment Tax Return. Once we receive the necessary information, we will:
- Prepare and file your tax return
- Answer your questions and provide guidance on your return
- Notify you of payment deadlines and assist with managing accounts
Have more questions? Check out our Complete Guide for everything you need to know about TOMS VAT in one place.
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