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Where Taxpayers and Advisers Meet

VAT Threshold - Mixed Supplies - TOUR OPERATOR MARGIN and Other Supplies

sw1085
Posts:10
Joined:Thu Oct 28, 2010 8:50 am
VAT Threshold - Mixed Supplies - TOUR OPERATOR MARGIN and Other Supplies

Postby sw1085 » Wed Dec 23, 2020 1:47 pm

Hi All

I wonder if someone could point me to any legislation or HMRC guidance on what the VAT threshold is where a business has mixed supplies and one of them is a tour operator margin scheme supply.

I've always been under the impression that if my non-TOMS supplies were £60k of turnover (not deducting costs of course) and my tour operator margin scheme supplies were £20k (turnover less direct expenses of the toms supply) that I would have £80k of turnover to assess against the threshold.

However, my client has said clearly that because she's selling mixed supplies, we have to look at turnover only.

For the life of me, I cannot find anything that refers remotely to what she's talking about.

Anyone any ideas of where this is written?

Thanks guys

les35
Posts:596
Joined:Wed Aug 06, 2008 3:09 pm

Re: VAT Threshold - Mixed Supplies - TOUR OPERATOR MARGIN and Other Supplies

Postby les35 » Wed Dec 23, 2020 3:02 pm

Where supplies fall within TOMS, the value of those supplies is the value of the margin; SI 1987/1806 art 7 refers. If all your supplies are TOMS, then you only need to register when the margin reaches £85k.
For other supplies, the usual rule applies that the value is as per the consideration, adjusted for the output tax amount.

sw1085
Posts:10
Joined:Thu Oct 28, 2010 8:50 am

Re: VAT Threshold - Mixed Supplies - TOUR OPERATOR MARGIN and Other Supplies

Postby sw1085 » Thu Dec 24, 2020 6:40 pm

Thanks Les

So you're saying for sure that my client is in fact wrong? What I've said is correct.....the TOMS supplies we look at margin and for non-TOMS supplies we look at turnover and as long as the sum of both (TOMS MARGIN + NON-TOMS TURNOVER) is below £85k. Then for sure we dont have to register for VAT. It doesnt matter that the business has a mixed group of supplies both TOMS and Non-TOMS.

Thanks again les and merry xmas.

Trevor S
Posts:72
Joined:Tue Jan 01, 2019 12:37 am

Re: VAT Threshold - Mixed Supplies - TOUR OPERATOR MARGIN and Other Supplies

Postby Trevor S » Fri Dec 25, 2020 10:27 am

In addition to the legislation quoted by Les, this is also explained in HMRC's Notice 709/5, paragraph 4.1 - link below:

https://www.gov.uk/guidance/tour-operators-margin-scheme-for-vat-notice-7095

les35
Posts:596
Joined:Wed Aug 06, 2008 3:09 pm

Re: VAT Threshold - Mixed Supplies - TOUR OPERATOR MARGIN and Other Supplies

Postby les35 » Tue Dec 29, 2020 3:27 pm

Do make a note of this forum thread and any other reading you have done. Your Annual Accounts will show a higher sales figure which might raise HMRC's attention. Your response is that TOMS applies.


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