As Imperial College Union is a VAT registered organisation, we are required to account for VAT relating to all sales of Travel or Accommodation (or packages that include either) using the Tour Operators Margin Scheme (or TOMS for short).
Income
As the VAT is dependant on the overall profit/loss, you do not need to charge VAT on trip/tour income, and should use VAT code ST - Sales Trips/Tours (TOMS).
Any sales of ancillary items that are not part of a package including travel or accommodation, such as tour merchamdise or entrance to an event, will be subject to VAT at their usual rate.
To simplify the process of reporting these sales to HMRC, please use an activity code in the range 20-29 for all income and expenses relating to trips/tours (You can use the same activity for multiple trips in the same year - larger tours should have their own activity code).
Expenses
As we do not charge VAT on trip/tour sales, we cannot reclaim any VAT on any of the related purchases covered by the trip/tour contributions. All expenditure should be coded as PT - Purchases Trips/Tours (TOMS) and charged to the same activity code as the corresponding sales. It is very important to ensure you do not claim VAT on these purchases or your group may be charged for any VAT wrongly reclaimed from HMRC.
FAQ
Q: Do I need to use TOMS for coach travel to/from training?
A: Yes, TOMS covers all sales of travel bought-in from an external provider.
Q: What if sell products that don't include travel or accommodation as part of my tour such as tour merch?
A: If these are sold separately (not part of a package) then they will be subject to VAT at the usual rate.
Q: What happens if my trip/tour makes a profit?
A: Generally CSP trips/tours should not make a profit when all expenses are included - remember you should include the costs of all activites that take place whilst on the trip/tour. Please email icu.finance@imperial.ac.uk to let us know if you think you will be making a signficiant profit.
