Weekly VAT Update – 21 November 2017
Alpha International Accommodation
This is the latest case, following Secret Hotels 2 and Hotels4u, where the courts have confirmed that Alpha was acting as an agent and did not fall within the TOMS as HMRC had argued.
Alpha is a UK travel agent specialising in marketing and supplying holiday accommodation to UK travellers. This covers over 239,000 hotels and apartments in more than 29,000 destinations across the entire European Union. The vast majority of Alpha’s business is conducted through its website.
Alpha argued that, as it was acting as a disclosed agent between hotels and customers rather than in its own name, it did not fall within TOMS. The issue was therefore whether the accommodation was supplied by the hotels to the travellers or by the hotels to Alpha who then supplied it to the travellers. The First-tier Tribunal considered Alpha’s website together with its terms and conditions, as well as the fact that hotel accommodation vouchers were provided to travellers to present to the hotels, indicated that Alpha acted as an agent, and that the accommodation was provided by the hotels to the travellers. The Tribunal therefore found that Alpha did not have to account for VAT on its profit margin under TOMS.