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Secret Hotels2 Ltd v CRC, Supreme Court
The taxpayer company operated a website to market holiday accommodation. Hotelier entered into a written agreement to have a hotel included on the site.
Customers booked accommodation through the site under the taxpayer’s conditions and paid the whole sum in advance. The taxpayer then paid a lower amount to the hotelier taking the balance as commission.
HMRC said the tour operators’ margin scheme (TOMS) applied and assessed the taxpayer to VAT on the basis it was a travel agent within article 306.1(a) of the EU Principal VAT Directive because it dealt with customers in its own name and used the services of other parties.
The company booked a room for a net sum to the hotelier paid once the holiday had ended and supplied the room in return for a gross sum which was received in advance of the holiday the Revenue argued.
The...
