Classic Collection Holidays has agreed to pay income tax on shopping vouchers awarded to incentivise travel agents.

The AITO member operator has made the change so the responsibility for the tax liability rests with the company rather than agency staff or their employers.

The move comes as the company expects to pay out record numbers of Marks and Spencer vouchers following a 20% rise in passenger and revenue figures since the start of the year.

Managing director Nick Munday said: “Although this is costing us a lot of money, we feel that it is the right thing to do.

“All those agents who work with us know that we always go the extra mile to help them, whether it’s with a difficult or problematic booking, marketing advice for promotional materials or financial assistance with advertising or consumer campaigns. 

“We’re absolutely delighted to announce that M&S vouchers from Classic now have the tax paid so there is no liability resting with agency staff or owners of agencies with regards to tax on our vouchers.”