The article explains how the VAT classification of a travel business as an agent or principal determines whether VAT is charged on the full travel supply or only on the intermediary commission. It outlines the key contractual and commercial factors that influence this classification and highlights the financial implications for finance teams, including VAT accounting, input VAT recovery, and the applicability of the Tour Operators Margin Scheme (TOMS).
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VatCalc · about 19 hours ago
The UK Court of Appeal on 12 June 2026 ruled that Bolt cannot use the Tour Operators Margin Scheme (TOMS) and must charge full 20% VAT on the entire fare. This reverses earlier tribunal decisions that had allowed Bolt to apply TOMS. The ruling has implications for other ride‑sharing operators such as Uber.
TaxPolicy · 1 day ago
A proposed permanent reduction of the UK hospitality VAT rate from 20% to 10% would cost an estimated £12‑14 bn per year, with the bulk of the benefit accruing to large chains such as McDonald’s. The analysis argues the cut is mis‑targeted, unlikely to lower prices, and would create incentives for businesses to re‑characterise activities to qualify for the lower rate. It suggests alternative measures—such as business‑rate reform or NIC relief—would better support the sector.
Business Wales · 3 days ago
The UK Government will temporarily reduce VAT on children’s meals and outings to 5% from 25 June 2026 to 1 September 2026, cutting the standard rate of 20%. The scheme covers children’s menu meals in restaurants, tickets for theatres, cinemas, soft play, adventure centres and theme parks. Businesses should review the GOV.UK guidance for eligibility and compliance.
VatIT · 5 days ago
The article provides a detailed checklist for UK VAT‑registered businesses to comply with the Making Tax Digital (MTD) programme, outlining digital record‑keeping, API submission, exemption criteria, and the penalty regime. It also highlights upcoming MTD requirements for Income Tax and offers guidance on software selection and consolidation.
Law360 · 5 days ago
A London tribunal ruled that Barclays' British branch was skeletal and did not constitute a fixed establishment for VAT grouping purposes, resulting in the loss of Barclays' appeal. The decision clarifies the application of UK fixed establishment rules for foreign entities.
1stopVAT · 5 days ago
HMRC has introduced a mandatory online registration portal for tax advisers who interact with HMRC on behalf of clients. The portal becomes operational from 18 May 2026 and must be fully functional by 31 March 2027. Advisers have three months from the opening of the registration window to apply for an Agent Services Account (ASA).
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Key Takeaways
A principal supplies travel services in its own name and may need to account for VAT on the full value, apply TOMS, or be zero‑rated; an agent arranges services supplied by another party and its supply is intermediary services, so VAT is considered only on its commission or fee.
If the business acts as an agent, VAT is charged only on its commission or fee; if it acts as a principal, VAT may be due on the entire margin of the travel supply.
Key factors include the contractual position between parties, who bears commercial risk, how the services are presented to the customer, and the legal relationship between supplier, intermediary, and traveller.
Finance teams must decide whether VAT is accounted for on the full selling price or only on commission, whether VAT is due at all, whether input VAT can be recovered, and whether TOMS applies.
Primary source
Read full article on LinkedIn by Laura ChippThis summary was published on VATfaqs.com on 9 March 2026. It relates to VAT developments in United Kingdom. The original source is LinkedIn Article by Laura Chipp.
