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Published on : Friday, November 15, 2013
Event professionals attending the Eventia and HBAA ‘TOMS and Package Travel Regulations Reform Seminar’ at Saffery Champness HQ on Wednesday 13th November were told that the industry’s associations would work together to review the objectives of the past decade’s work on TOMS reform.
David Bennett, travel VAT partner at Saffery Champness, and Chris Parnham, chairman of the HBAA, presented the issues behind the current European position on TOMS. Under the current HMRC agreement, TOMS cannot apply to a disclosed agency, and third party costs can be recovered from the client as a disbursement. TOMS can, however, apply to undisclosed agencies, according to the nature of the work undertaken. Yet VAT is only charged if the client and supplier are within the UK.
The existing ABTA, Eventia, HBAA, ETOA and GTMC proposals, which were put to the Treasury in 2010/2011, recommend the retention of TOMS, with a B2B ‘opt-in’ clause for administrative ease. Also included in this proposal is:
• Apportioned margins to reflect the liability of the service provided
• Fixed margin accounting as an option
• Subjecting non-EU businesses to TOMS when selling EU travel to EU customers
• Allowing an aggregated basis of calculation
Audience discussions indicated that UK agents welcome the flexibility of not being in TOMS, but also want competitors outside the EU to face the same issues: if business placed within the EU is subject to TOMS, it was asserted that agents would begin placing business outside of the single market.
The European Commission is understood to be keen to talk to interested parties ahead of new proposals on TOMS (reportedly in 2015), and with clear discontent regarding HMRC’s current positioning, it was decided that the event industry’s associations would meet to work towards an updated proposal for TOMS reform.