HMRC have often argued that agencies must account for VAT under TOMS making events more expensive than they should be and putting agencies at a competitive disadvantage. Now though HMRC has suffered a damaging reversal which will make it more difficult for them to apply TOMS to an agency’s business.
The Court decided that HMRC’s arguments that Secret Hotels was a supplier of accommodation rather than an agent of the hotel were without foundation. As a result, agencies now have much greater opportunity to ensure that their VAT declarations and costs reflect their true agency status.
David Bennett, from Saffery Champness on behalf of the EVCOM Regulation Committee has prepared a paper explaining the possible effect on event agencies of this decision which could see a significant development in how TOMS is applied to EVCOM members. This is downloadable from the member only area of the new EVCOM website.
Brian Kirsch, Managing Director of Event Assured and Head of EVCOM’s regulation committee said, “This is another landmark decision on TOMS, which means HMRC are going to have to reconsider their approach to TOMS in the events sector. Once again it highlights the need for reform of TOMS at a European level.”