ABTA expresses concern over TOMS changes

ABTA expresses concern over TOMS changes

ABTA is becoming increasingly concerned over the impact the changes to the Tour Operators Margins Scheme will have on its members when they are introduced in eight months' time.

ABTA head of financial services Mike Monk said it is the complexity of the new regulations which are being introduced on January 1 2010, which are of the biggest concern.

The association is planning to hold a seminar in July on the changes to help members understand the rules, which are being introduced by the European Commission.

He added: "[The new legislation] is potentially extremely complicated.

"It is being introduced in eight months' time and that's of great concern as I'm not sure everyone is ready for the new rules."

Currently travel firms pay the VAT under the TOMS scheme at the standard rate of 15% on the margin of a holiday, not the full price. The current flexibility over TOMS in the UK allows operators to opt out of the scheme depending on the type of trip being sold.

With the rules and rates varying around Europe, the European Commission is bringing TOMS into its own regulations, which could inflate VAT bills by as much as 30% instead.

European Tour Operators' Association executive director Tom Jenkins added the changes could also drive travel wholesale suppliers out of business in the UK, leading to possible increases in the cost of travel product.

Accountancy firm Saffery Champness partner David Bennett added the new rules would even see agents need to supply lists of every hotel they sell in the European Union if they receive a commission payment directly from the property.

He added: "This sales list will have to be available to all the member states."

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