Understanding the Tour Operator’s Margin Scheme (TOMS)

TOMS stands for the Tour Operator’s Margin Scheme and is a VAT scheme aimed at simplifying the rules for suppliers of designated travel services.


The scheme doesn’t just apply to tour operators, but often applies to travel agents, events organisers and other businesses selling travel.  Very simply TOMS imposes a VAT charge on the gross margin made by the operator rather than the usual 20% applied to gross sales, and VAT on the costs of travel supplied therefore, can’t be recovered.


The scheme covers anyone who is making these types of supply even if it is not your main business activity or you do not view yourself as a tour operator.  As a business within leisure and tourism the types of activities that may be included within TOMS are:-


  • Buying in coach passenger transport to collect guests at the start and end of their stay
  • The services of guides for your guests
  • Buying in car hire for your guests


If you feel that any of the above may apply to your business please contact us for advice.