We are aware that HMRC are looking into the VAT treatment of B2B wholesale supplies of travel packages (under the TOMS opt out). Their previous position , which was to treat these as “general rule” supplies, appears to have changed. We know that many travel businesses treat packages in this way for VAT purposes and many have obtained HMRC rulings on this point. HMRC’s position to date (whilst not published in their guidance), has been widely applied since 2010 when the place of supply VAT rules changed.
However, in a recent case, HMRC have taken the view that the place of supply of a UK hotel and UK event ticket package, falls to be treated under the “land related” rules and are assessing for UK VAT.
This appears to be a significant change of policy (which they haven’t shared with the sector) and we anticipate that they will be looking to target the sector more widely.
If your business operates in this way and you would like further advice on the potential implications , please contact Jane Stacey, VAT Partner at [email protected].
