Revenue & Customs Brief 27/09 publicises changes to be made to the Tour Operators’ Margin Scheme (TOMS) in order to comply fully with EU law. The changes are to take effect from 1 January 2010.

The European Commission has written to the UK raising concerns about aspects of the UK's operation of the TOMS and opining that the UK arrangements in respect of these issues were not fully compatible with the VAT Directive (2006/112 EC).

Following legal advice, the UK has accepted that aspects of the scheme were not implemented properly and gave a commitment to amend the TOMS, in order to comply with European law. These aspects concern:

• supplies to business customers for subsequent resale
• supplies to business customers for their own consumption and supplies of educational school trips
• use of market values in respect of in-house supplies

Full details of the changes to the TOMS, including details on how to “opt in” and “opt out” of the scheme and worked examples of the scheme, are available at http://www.hmrc.gov.uk/briefs/vat/brief2709.htm