 Poster: A snowHead
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Thought anyone who has already booked a ski trip may want to read this. It's worth CASH.
The new VAT rate of 15%
Rules -
* your ski holiday must start after midnight today (01/12/08 )
* The reduction DOES include any deposit you may have paid - IF it is part of the total cost (regardless of what anyone tell you, it DOES regardless of when you paid it - the date of "supply" is the start date of the holiday NOT the date of payment)
* It does NOT include any amount within the total that is for insurance
* You CAN ask for a VAT breakdown from a supplier, that’s the TO if booked direct or the travel agent if used
* It ONLY applies to holidays with the EU - so anyone off the US = tuff
* You MUST donate one cream cake for each £50 you get to me
* The operator MUST be based in the UK (operator is the company you booked with)
The new VAT rate of 15% will do s0d all to help the economy as VAT is an "added" tax percentage.
But it makes G Brown look like he can do something ??
So you say have a shop selling stuff
With VAT @ 17.5%
You buy product XYZ from a supplier for £80
Which is really £66.9 + VAT
You can claim back the VAT on the purchase
So you claim £14
The cost to you in reality is £66
You add on you profit of say 5% (£3.3)
You sell product XYZ for £69.30
Reduce the VAT to 15%
you still need to make the same “amount” not percent of profit
Product XYZ will cost you the same £66.90
But the VAT is less so you give the supplier £76.93
You can claim back the VAT (£11.53)
The cost to you in reality is £65.4
Add your profit of £3.3
You sell product XYZ for £68.7
The saving to the customer is 0.85%
Not 2.5%
Note - all the figures have been rounded all over the place as it's just an example
But with a holiday it's all different as virtually all TO's work on the TO's VAT margin scheme
So, on a holiday costing £1000 (where the TO’s cost are around £850)
The new cost is £978
“if” the new rate is passed on??
You have a whole £22 to spend of jelly babies
The problems you will have is in getting the information you need. But, don't forget that you ARE paying a VAT amount on your holiday and so you have a right (it's my right) to get a VAT receipt which MUST show the amount of VAT charged.
Give it a go, you never know unless you try
Last edited by Poster: A snowHead on Mon 24-11-08 22:36; edited 1 time in total
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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What about flights booked for future travel?
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Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?
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No - not vatable
But not for want of trying - there is a thingy called the Chicago Convention which basically stop G Brown & co doing this sort of stuff - BUT our beloved G Brown & Co are to trying to argue that it would not be a tax on airline fuel etc but a tax on green house gasses - go figure
Sorry to edit this but just found this
http://www.publications.parliament.uk/pa/cm200607/cmselect/cmenvaud/227/227we18.htm
they are REALLY trying to wack you for more on your ski hols
Ain't politicians horrid 
Last edited by Well, the person's real but it's just a made up name, see? on Mon 24-11-08 22:49; edited 1 time in total
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You need to Login to know who's really who.
You need to Login to know who's really who.
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Wayne, what a useful post. Cheers.
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Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.
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| flowa wrote: |
| Wayne, what a useful post. Cheers. |
Cheers
Maybe should have added at the end
You have no chance, but worth a try ha ha
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You'll need to Register first of course.
You'll need to Register first of course.
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fastandicy,
You never were going to be entitled to get £130 back Unless (unlikely) to TO was making around £6,500 profit ( 130 / 2 * 100 = 6,500) on your holiday (that is 2% of the Margin between allowable costs and income)
Don't forget the amount of VAT you have been charged within your holiday cost does NOT belong to the TO or the travel agent and the government has just said that they want less - so what happens to the difference. If you don't ask for it, the TO will just keep it. Life’s like that.
I'm a little sad  Money saving expert dot com is a brill site. But in this case.... what can ya do. Some of the answers are just wrong and to use "it's extremely complicated" as a reason not to answer a question is not what I'd come to hope for from that site.
The fact that there is no vat on flights make no difference, the fact that your hotel is in another country makes no difference, etc. Of course not all supplies are allowable (that is - can be used within the "margin" costs) but as always, G Brown & and Co will get there slice of flesh. As a tourist this is a good thing by the way. It is in the TO's best interests to have as many "costs" within the Margin. The more "costs" you have the less you need to declare as profit and so the less VAT payments. But as many things are not allowable (such as staff wages, advertising, etc) then the amount of VAT is increased and so you - in this case - "may" be able to get a larger amount back from the TO.
ha ha s0od all chance really.
The whole reason the TO's margin was brought in was to get money of UK companies who spend money in other countries. As I said it does not apply to trips outside the EU. As an example, we run trips to Kilimanjaro, Everest Base Camp, Inca Trail, etc etc etc and we pay no VAT at all for these. But all our ski trips are to the EU so we do have to give Mr Brown a percentage. And as of 1/12/08 this percentage has gone down.
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You'll get to see more forums and be part of the best ski club on the net.
You'll get to see more forums and be part of the best ski club on the net.
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Thanks Wayne, that's really useful! For 3 ski trips next year that could save us a bit - definitely cream cakes on the way for you! Assuming we manage to get it back that is - I'll dig out the paperwork this evening 
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Wayne, interesting - I wonder if SkiFinder would care to comment ?
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snowHeads are a friendly bunch.
snowHeads are a friendly bunch.
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| Wayne wrote: |
Thought anyone who has already booked a ski trip may want to read this. It's worth CASH.
The problems you will have is in getting the information you need. But, don't forget that you ARE paying a VAT amount on your holiday and so you have a right (it's my right) to get a VAT receipt which MUST show the amount of VAT charged.
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That is quite simply not true.
It is indeed your right to get a VAT receipt, but it is not ours, where "we" are end consumers.
Only other VAT registered bodies purchasing in the course of their business have a right to a VAT receipt, although in practice most VAT registered organisations find it easier to just give one to anybody that asks, rather than trying to confirm the VAT status of the customer.
But it really isn't as simple as you suggest anyhow, in that the date of the tax point is not necessarily the "supply point". Although it may well be for most TOs.
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And love to help out and answer questions and of course, read each other's snow reports.
And love to help out and answer questions and of course, read each other's snow reports.
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Wayne,
Thanks for your posting.
Does the TO apply VAT to the total holiday price which may include zero rated components like flights?
If they do apply VAT to the whole price then to calculate the VAT you should get back you should :-
1) Divide the total price paid by 117.5 (because of VAT you have paid "117.5%" of the price)
2) Multiply the result from 1) above by 2.5 (this is the 2.5% reduction of VAT).
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BUT, they may just decide to keep the 2.5% to themselves as increased profit. They don't have to pass it on to the consumer. So in effect, for the business, the tax burden has been reduced slighly, but this may not directly mean a reduction in what you decide to charge your clients. As a business you can choose to charge what ever you like. I would guess that for something that has been pre-booked, then there may be a case where you can ask for the VAT reduction - nevertheless it is worth trying this out.
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You know it makes sense.
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That is quite simply not true.
It is indeed your right to get a VAT receipt, but it is not ours, where "we" are end consumers.
quote]
The rules here are dead simple (even for me).
To quote to rules
Anyone supplying goods and services direct to the public does not have to provide a VAT invoice unless the customer requires one.
It is the words "requires" that causes the problem.
Some people will read this as "requires" = has a legal need.
Others (most) will understand "requires" as wants. ie. I require 2 sugars in my tea, which is different from "need" for to legal obligation. So you do have a right to a vat invoice for anything you buy from a vat registered company even as the end customer.
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Otherwise you'll just go on seeing the one name:
Otherwise you'll just go on seeing the one name:
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Poster: A snowHead
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I'm more concerned by the weak pound then I am saving 2.5% percent vat.
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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Wayne, It doesn't matter what you or I "understand" from that guidance. It is only guidance.
The actual law does not say anyting about "the customer requires one".
All it says (VAT regulations 1995) is:
| Quote: |
Obligation to provide a VAT invoice
13. — (1) Save as otherwise provided in these Regulations, where a registered person—
(a) makes a taxable supply in the United Kingdom to a taxable person, or
(b) makes a supply of goods or services other than an exempt supply to a person in another member State, or
(c) receives a payment on account in respect of a supply he has made or intends to make from a person in another member State,
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So you have no right in law to a VAT invoice unless you are a "taxable person" (which for the purposes if these regulations means anybody registered for VAT when dealing in the cpaacity for which they are registered).
That guidance is merely trying to put the law into more natural English, and in this case making it less clear by doing so. 
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Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?
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alex_heney,
I stand corrected, I have checked what you posted and I was wrong about what I said.
Thanks for that Alex.
I learn something new everyday.
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You need to Login to know who's really who.
You need to Login to know who's really who.
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Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.
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| papasmurf wrote: |
| I'm more concerned by the weak pound then I am saving 2.5% percent vat. |
I think most TO's are like this. I said in another thing that a mate of mine runs a small TO and he is fully booked for next season - but will almost certainly go bust as he can'rt afford to buy the euros to pay the hotels. How mad is that.
We, like most TO's who can afford it, buy futures (we got ours @ 1.38 ) but even these are factored by a drop percent, so everyone is just waiting to see what happens. Mind you the bank has made made poo-poo loads on our factoring for the past 10 years, but ha ha this year we win.
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You'll need to Register first of course.
You'll need to Register first of course.
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Interesting thread.
As someone who runs a VAT registered company, I've been reading the HMRC notes on the new VAT rate (http://www.hmrc.gov.uk/pbr2008/vat-guide-sum.pdf).
However, (if I'm reading it correctly) the info seems to suggest that it's down to the company to choose whether or not to offer credits .... to quote from the HMRC website:
Are there any special rules for sales spanning the change of rate?
Yes. If you have received a payment or issued an invoice before 1 December 2008 for goods that will be provided (or services delivered) after 1 December 2008, you have a choice. You can choose to account for VAT at the new rate of 15% on the amounts already received or invoiced. You don’t need to tell HMRC if you do this. In these circumstances, any payments received or invoices issued after 1 December will always be subject to the new rate of 15%. But you do need to issue a credit note to your customer if you have already issued a VAT invoice showing the old rate of VAT.
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Wayne, Very very interesting thread. Thanks for starting it.
I e-mailed my TO (Iglu) asking how much my refund would be and got the following reply
"Hi Michael,
Thank you for your email.
VAT isn't payable on package holidays, therefore the cost of your holiday will not be affected by the chancellors recent announcement.
Kind regards
Craig Isted
Customer Care Team Leader
IGLU.COM Ltd."
Your above posts tend to suggest this isn't true at all or am i not understanding the complexities of it fully. In essence, what's my next move, should i e-mail back and call him liar? 
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It sounds to me as if they have been asked the same question a thousand times today.
If you have booked accommodation and travel then your holiday is covered by the TO's margin scheme, if the company has registered.
Dead easy to check just call the vat man on 0845 010 9000 and ask.
| fastandicy wrote: |
| VAT isn't payable on package holidays, therefore the cost of your holiday will not be affected by the chancellors recent announcement. |
This is not correct for most TO's however it may be for this one for some reason, call the vat man and ask
But let face it though TO's have been *****ed by the exchange rate and they are REALLY suffering, so this extra bit from G Brown is a bonus. I would suggest you just smile a knowing smile and leave it at that. TO's have feeling too 
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You'll get to see more forums and be part of the best ski club on the net.
You'll get to see more forums and be part of the best ski club on the net.
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The amount is so tiny it's irrelevant.
If you book a £1,000 holiday. I guess the TO will be delighted to make 10% profit i.e. £100 profit - and probably happy enough with £50. In general, TOs only (broadly speaking) charge you VAT on their profit - margin.
So the VAT is £14.50 at 17.5% (or 7.25 if his profit is £50).
VAT reduces to 15%, VAT becomes £13.10. (or £6.55 if his profit is £50)
So the VAT saved is £1.40 on a £1,000 profit. Not any of the more fanciful figures running around.
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snowHeads are a friendly bunch.
snowHeads are a friendly bunch.
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And love to help out and answer questions and of course, read each other's snow reports.
And love to help out and answer questions and of course, read each other's snow reports.
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My reply from Mark Warner, via Inspired to Ski/Action Outdoors:
| Quote: |
Response from Mark Warner:
Please advise Ms xxx that holidays are not subject to VAT charges, therefore she won’t be affected by the recent change in the VAT rates. |
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You know it makes sense.
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| James the Last wrote: |
The amount is so tiny it's irrelevant.
If you book a £1,000 holiday. I guess the TO will be delighted to make 10% profit i.e. £100 profit - and probably happy enough with £50. In general, TOs only (broadly speaking) charge you VAT on their profit - margin.
So the VAT is £14.50 at 17.5% (or 7.25 if his profit is £50).
VAT reduces to 15%, VAT becomes £13.10. (or £6.55 if his profit is £50)
So the VAT saved is £1.40 on a £1,000 profit. Not any of the more fanciful figures running around. |
I fully agree - not worth the bother
So the VAT is £14.89 at 17.5% (or 7.44 if his profit is £50).
VAT reduces to 15%, VAT becomes £13.04. (or £6.52 if his profit is £50)
There you go - even the vat office don't understand the vat laws
2.5 Is the TOMS affected by where the supplies are enjoyed?
No, the TOMS applies to travel services that are enjoyed:
within the UK;
within the EU (that is, other than the UK);
outside the EU.
This is wrong - you can not levie an EU tax (like vat) on supplies outside the EU. So if you are going skiing in the US there is no vat content - but there may be something elese, wouldn't know as never been to the US.
To quoteFlights to destinations Outside the EU
The Treasury maintain that, since VAT is an EU tax, it is not possible to impose it on flights from the EU to the rest of the world
Source - as above
http://www.publications.parliament.uk/pa/cm200607/cmselect/cmenvaud/227/227we18.htm
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Otherwise you'll just go on seeing the one name:
Otherwise you'll just go on seeing the one name:
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| Wayne wrote: |
There you go - even the vat office don't understand the vat laws
2.5 Is the TOMS affected by where the supplies are enjoyed?
No, the TOMS applies to travel services that are enjoyed:
within the UK;
within the EU (that is, other than the UK);
outside the EU.
This is wrong - you can not levie an EU tax (like vat) on supplies outside the EU. So if you are going skiing in the US there is no vat content - but there may be something elese, wouldn't know as never been to the US.
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I don't think it is wrong. As you pointed out yourself earlier in the thread, it isn't the package that the VAT is being levied on, but rather on the TO's margin
And the services which create that margin are provided in the UK.
That is slightly different, and would be the equivalent of putting VAT on the whole holiday package.
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Poster: A snowHead
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| alex_heney wrote: |
I don't think it is wrong. As you pointed out yourself earlier in the thread, it isn't the package that the VAT is being levied on, but rather on the TO's margin
And the services which create that margin are provided in the UK.
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Hi Alex, not really on this point. The services which supply the margin (profit) are a supply outside the EU, maybe a ski holiday to the US. As the non-tour element of the costs (admin, office rent, advertising, printing, etc) is not allowable against TO margin costs they do not count towards the vat payable, so vat is not payable on the holiday itself.
But the TO will of course have to declare for vat (at the standard rate) for all this admin, advertising, etc. Mr Brown always gets his cut even if he tries to hide the fact.
So the advice is not in line with the current law But, as we all know, sooner or later, G Brown & Co will find a way to get more off us - lets face it he needs it now that he (via his supernumerary) has taken out a national credit card and maxed it for us all.
| alex_heney wrote: |
That is slightly different, and would be the equivalent of putting VAT on the whole holiday package.
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Yes you're right, well spotted. I think they (men-in-black) are looking for ways to apply tax to all flights using the (political expedenent) idea that if the supply even touches EU terroitory then it's payable. Of course this will eventually be wrapped up as some form of environmental tax as but…
Does anyone else see UK politicians as similar to pigs at a trough. In the US if politicians put up tax they get voted out, but here we have no choice, as everyone up for election here wants to put them up.
***************
Just had a thought - if any TO's are looking at this, send me a PM and I will give you Patrick's details. He will sort out your vat and (almost always) get you some back payments from the vat office. Best thing is he doesn't charge he he can't get you anything. No, I'm not on commission.
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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Just asked Ski Total what they were going to do about my VAT refund - was told that as I had already paid in full (though not travelling till 21 Dec) vat was payable at the 17.5 rate so they would not give any refunds.
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FAQ
