A VAT tax tribunal delivered some good news for travel agents in a long-running dispute over liability for fees levied on credit card charges.
Following that decision it was claimed that Her Majesty’s Revenue and Customs had started targeting small agents to claw back tax it believes was unpaid on those card charges.
Abta said it disagreed with that verdict which was challenged on appeal by NEC, the national exhibition arena in Birmingham.
Last week a first-tier VAT tribunal delivered a verdict which favoured the travel industry and could see travel firms claim back overpaid tax.
Grant Thornton senior partner and VAT expert Nick Garside said he was yet to see the judgement in full, but that on the face of it it was good news for agents.
“We are waiting to see the full judgment in the NEC case but clearly a move towards VAT exemption for booking fees represents good news for the travel industry.
“HMRC has been making inquiries into the VAT treatment of credit card charges for a number of years and have been maintaining that such charges should be subject to VAT.
“If the tribunal judgment can be applied to such fees then clearly the industry can breathe a sigh of relief and travel agents may want to consider making claims for overpaid tax.
“Whilst the judgment may be subject to appeal this is clearly a positive development for the industry.”
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