Upper Tribunal Tax and Chancery Chamber

UT (Tax & Chancery) UT/2023/000091 - [2025] UKUT 00014 (TCC)

Fecha: 04-Dic-2024

UK Legislation

UK Legislation

10.

Section 53(1) VATA 1994 provided at the material times:

53 Tour operators

(1)

The Treasury may by order modify the application of this Act in relation to supplies of goods or services by tour operators or in relation to such of those supplies as may be determined by or under the order.

(2)

…

(3)

In this section ‘tour operator’ includes a travel agent acting as principal and any other person providing for the benefit of travellers services of any kind commonly provided by tour operators or travel agents.

11.

The TOMS Order was introduced with effect from 1 April 1988. Articles 2 and 3 define the supplies which fall within the scope of the TOMS:

2 Supplies to which this Order applies

This Order shall apply to any supply of goods or services by a tour operator where the supply is for the benefit of travellers.

3 Meaning of ‘designated travel service’

(1)

Subject to paragraphs (2) and (4) of this article, a ‘designated travel service’ is a supply of goods or services –

(a)

acquired for the purposes of his business; and

(b)

supplied for the benefit of a traveller without material alteration or further processing;

by a tour operator in a member State of the European Union in which he has established his business or has a fixed establishment.

(2)

The supply of one or more designated travel services, as part of a single transaction, shall be treated as a single supply of services.

(3)

…

(4)

The supply of goods and services of such description as the Commissioners of Customs and Excise may specify shall be deemed not to be designated travel services.

12.

For present purposes, we are concerned with the question of whether the supplies received by Sonder from third party landlords were supplied onwards for the benefit of travellers “without material alteration or further processing” within the meaning of Article 3(1)(b).

13.

Article 7 of the TOMS Order makes provision for the VAT on a supply falling within it to be taxed by reference to the margin:

Subject to articles 8, 9 and 9A of this Order, the value of a designated travel service shall be determined by reference to the difference between sums paid or payable to and sums paid or payable by the tour operator in respect of that service, calculated in such manner as the Commissioners of Customs and Excise shall specify.

14.

It is also important to note that the supply of an interest in land is an exempt supply by virtue of Schedule 9 Group 1 Item 1 VATA 1994, although a supply of hotel accommodation or similar is excluded from exemption and is therefore a standard rated supply:

Item 1 The grant of any interest in or right over land or of any licence to occupy land, or, in relation to land in Scotland, any personal right to call for or be granted any such interest or right, other than –

…

(d)

the provision in an hotel, inn, boarding house or similar establishment of sleeping accommodation or of accommodation in rooms which are provided in conjunction with sleeping accommodation or for the purpose of a supply of catering;

(e)

the grant of any interest in, right over or licence to occupy holiday accommodation;