Advantage has revealed it will no longer approve and promote non-cash incentives to its agents if tour operators do not pay the necessary tax.

The hardline policy, launched by the consortium this week, covers incentives such as vouchers and soft toys commonly dished out to individual agents by operators to encourage them to book their company’s holidays.

Advantage commercial director Julia Lo Bue-Said admitted the issue had been a “grey area” for some time.

As the law stands, agency owners whose staff accept non-cash incentives could be liable for tax if it is not paid for by the tour operator.

The consortium has alerted operators it will no longer promote non-cash incentives through head office if they do not meet the tax liabilities.

Lo Bue-Said said: “There are so many loopholes and we have had to get in experts to look at this. The only safeguard we feel comfortable with is not to endorse these incentives unless the tax is paid.

“We are also giving advice to owners of agencies to be cautious if their staff are getting vouchers, for example, as there is a tax liability.”

Holiday Discount Centre managing director Steve Campion said: “It will remove the risk of any tax liability falling on the agent. At the moment some employers could get a nasty shock.”

Around 5% of incentives offered each month by operators to Advantage are not cash based.

Lo Bue-Said admitted many operators had resorted to offering incentives direct to frontline sales consultants because Advantage head office had clamped down.

“We have stricter sales policies that cut opportunities for operators to go direct to our members. The only way they [operators] can get to them [agents] is by way of the back door where staff are not letting their employers know.”