Small and medium sized travel agents could lose out on a vital cash windfall by failing to claim back VAT on discounts.
The tax claims relate to the commission rebated to the customer. Until now travel agents have paid VAT on the full commission regardless of how much they gave away.
Accountancy firm Smith and Williamson said while larger agencies are well aware of the situation smaller companies appear to be “unaware of what could be owed to them”.
Claims can be back dated to a maximum of four years so delays in submitting a claim will reduce the amount.
Hannah Dobson a VAT director at Smith & Williamson said: “Medium and smaller firms are literally leaving cash on the table by failing to submit their claim.
“As each day goes by, the amount they can claim falls due to the four year cap. It seems that the larger chains are on top of this but many smaller organisations are unaware of what could be owed to them.”
Dobson added: “The claims procedure is straightforward and not time consuming. Any firm who keeps a note of the discounts they have made on holidays sold on behalf of tour operators should be able to do this quite easily.
“I would advise any firm who thinks they are eligible to claim to look into this without delay.”