Tour Operators' Margin Scheme (TOMS) VAT Calculator
Calculate VAT on holiday packages under the Tour Operators' Margin Scheme. Compute your margin, output tax, and effective VAT rate under TOMS rules.
TOMS VAT Calculator
Under TOMS, VAT is charged on the margin (selling price minus cost of bought-in travel services), not the full selling price.
Bought-in accommodation, transport, local excursions, etc.
Frequently Asked Questions
What is TOMS?
The Tour Operators' Margin Scheme (TOMS) is a special VAT accounting scheme for businesses that buy in and resell travel services as a principal. VAT is charged on the margin (selling price minus cost of bought-in services), not the full selling price.
Which services are 'designated travel services' under TOMS?
Accommodation, passenger transport, hire of means of transport, and certain ancillary services (e.g., local guiding) when supplied to the traveller. In-house services (e.g., your own coaches) are excluded from TOMS.
How is TOMS VAT calculated?
VAT = (Selling Price − Cost of Bought-in Services) × Rate ÷ (100 + Rate). For standard rate: margin × 20/120 = margin × 1/6.
Can TOMS businesses reclaim input VAT on bought-in services?
No. Under TOMS you cannot reclaim input VAT on designated travel services — the margin calculation compensates for this. You can reclaim input VAT on overhead costs (offices, marketing, etc.) in the normal way.
Does TOMS apply to B2B sales?
TOMS applies to both B2C and B2B supplies of travel packages where you are acting as principal (buying in and re-selling). Agents acting on behalf of principals use the normal VAT rules instead.
What is the annual accounting period for TOMS?
You must calculate TOMS VAT on an annual basis (year-end adjustment) as well as provisional quarterly payments. The final adjustment can result in a repayment or additional payment.
Are zero-rated margins possible under TOMS?
Yes, if all the underlying services are zero-rated (e.g., international transport), the entire margin is zero-rated. Mixed packages require apportionment between standard and zero-rated elements.
Do TOMS rules still apply post-Brexit?
UK TOMS rules broadly mirror the EU scheme and remain in place under UK domestic VAT law (Schedule 10A VATA 1994), though there are differences from EU TOMS for B2B supplies made after Brexit.