The Tour Operators’ Margin (TOMS) is a scheme for businesses that buy-in and re-sell travel, accommodation and certain other services.
Until now, agencies managing events involving any element of TOMS accounting had to pay VAT on the full amount of the non-travel part. In certain circumstances, the VAT-registered clients of the event agency could not reclaim the VAT.
This put UK agencies at a competitive disadvantage when the system was compared with VAT accounting in other parts of the EU.
Following 18 months of negotiations with HMRC, the trade body’s regulation committee has announced that it will be possible for agencies to issue VAT invoices on the "non-TOMS" element (known as "in-house supplies") of an event.
Brian Kirsch, Eventia regulation committee chairman, said: "We are delighted to have reached this milestone agreement with HMRC. It sounds very dull and technical, but this change will be of immediate benefit to agencies wanting to compete in the European market, and who want to account for VAT correctly.
"I am grateful to those agencies who have worked with the committee, and in particular to the David Bennett of Saffery Champness for his expert input."