| Journal: TWUK | Section: |
| Title: | Issue Date: 03/07/00 |
| Author: | Page Number: 3 |
| Copyright: Other |
VAT ruling could see tour operators share in £20m windfall
TOUR operators could be in for a share of a £20m windfall after a High Court decision ruled that Customs and Excise should repay VAT levied on the brochure price of a package holiday sold at a discount.The case, which has been running for two years, was brought by First Choice with the support of rivals Airtours, Thomas Cook and Thomson.
They argued they should only pay VATon the price paid for the holiday, not the price in the brochure.
A VAT tribunal in November upheld their claim but Customs then appealed. It claimed VATis payable on the advertised price.
KPMG’s specialist travel industry VAT team director Chris Fyles said the judgement should clear the way for tour operators to receive refunds.
But he added that they need to agree a formula for repayment of VATwith Customs.
“Some of these discounts go back four or five years and in most cases there are no records of the reductions given by agents,” he said.
However, Customs said it planned to lodge an appeal against the High Court decision.