'VAT behind OTA concern on package travel'

'VAT behind OTA concern on package travel'

Online travel agents concern at being liable for VAT if they are designated travel organisers and not agents is at the heart of their opposition to proposed changes to the Package Travel Directive (PTD).

That is the view of former Abta chairman John McEwan, now chairman of Holidayplease.

A group of OTAs, including Travel Republic and On the Beach, were joined by the Travel Network Group and others in setting up the Association of Travel Agents (ATA) at the end of last year.

They claimed Abta had misrepresented the views of agents in Brussels – a claim Abta has vigorously rejected.

McEwan told the Elman Wall Travel Directors Summit in London yesterday: “The real concern within that group is the risk they will no longer be considered agents but as organisers and liable for VAT.”

He said: “There is a debate about whether agents will have to take on more responsibility [under the PTD proposals].”

McEwan, whose term as Abta chairman ended this spring, pointed out: “Agents have adapted to Flight Plus after there was initial resistance from a number of online travel agents (OTAs).”

He added: “There is an active dialogue between the group [ATA] and Abta.”

McEwan defended Abta’s role, saying: “Abta is incredibly influential in Brussels and Westminster. 95% of agents and tour operators are Abta members.

“Recognition [of the Abta name] is incredibly high and Abta has a great public affairs team – much stronger than five years ago.”

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