Following changes to the Tour Operators' Margin Scheme (TOMS) from 1 January 2010, Revenue & Customs Brief 21/10 sets out details of an agreement with representative bodies of the business travel sector about invoicing for supplies under the arrangement known as ‘hotel billback’.

TOMS is a special VAT accounting scheme applying to certain designated travel supplies such as accommodation and transport that are bought in and sold on by businesses. Under the scheme, businesses are unable to recover VAT charged on their purchases but account for VAT on their supplies only on their margin. This means that invoices for these supplies cannot show the VAT element, which becomes sticking tax to business customers.

The Brief is available on HMRC's website at: http://www.hmrc.gov.uk/briefs/vat/brief2110.htm