The VAT payable under the tour operators’ margin scheme (‘TOMS’) is not calculated individually for each supply. Instead it is calculated globally at the end of the tour operator’s VAT year (which is 31 March, 30 April or 31 May) (in due course HMRC may propose to replace the global treatment with a transaction-by-transaction basis following an ECJ case in 2013).

The government is not prepared to wait a year for the VAT. Accordingly, a tour operator must make quarterly VAT returns like many other traders. The VAT on the quarterly return is calculated on a provisional basis using the margin calculated for the previous year.

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