Recent changes to VAT in operating TOMS
The UK has produced a new updated public notice 709/5 which explains how you must account for VAT if you buy-in and re-sell travel facilities directly as an association and act as a principal or undisclosed agent (that is, acting in your own name). This notice should be read in conjunction with Notice 709/6 Travel agents and tour operators. This updated version of the notice has been produced primarily to include important changes to TOMS legislation and practice which come into effect from 1 January 2010. These changes have already been published in Revenue & Customs Brief 27/09. The European Commission wrote to the UK raising concerns about aspects of the UK’s operation of the TOMS and opining that the UK arrangements in respect of these issues were not fully compatible with the VAT Directive (2006/112 EC).The UK has accepted that aspects of the scheme were not implemented properly and gave a commitment to amend the TOMS, in order to comply with European law. These aspects concern: •supplies to business customers for subsequent resale •supplies to business customers for their own consumption and supplies of educational school trips •use of market values in respect of in house supplies If you are unsure of the VAT treatment for your association, then seek professional advice.