Tour Operators Margin Scheme (TOMS) ― overview

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note provides an overview of:

•
what a tour operator is
•
the effect of the TOMS
•
key terms relating to the TOMS

This guidance note also includes links to other guidance notes which provide more information. For detailed commentary, see De Voil Indirect Tax Service V3.591–V3.594.

What is a tour operator?

For the purposes of the Tour Operators Margin Scheme (TOMS) the term ‘tour operator’ includes:

•
a travel agent acting as principal
•
any other person providing for the benefit of travellers services of any kind commonly provided by tour operators or travel agents

VATA 1994, s 53

The effect of the above is that any person that has a business activity that in any way involves buying in travel services and, without material alteration or further processing, reselling the travel services as principal or as an undisclosed agent, is a tour operator. The following are two examples of tour operators:

•
a coach operator that buys in and, without material alteration or further processing, resells hotel accommodation

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