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Holiday season

23 February 2016 / Elman Wall
Issue: 4539 / Categories: Comment & Analysis

An overview of the tax implications relating to the travel industry.


  • The financial requirements of the regulatory bodies can impose constraints on business structure.
  • Business profits cannot be extracted without considering the balance sheet impact.
  • The tour operators’ margin scheme aims to simplify the travel industry VAT obligations.
  • Travel industry employees may receive benefits including from third parties.
  • Particular attention may need to be given to the residence status of those working overseas.

Most of the travel industry operates through limited companies. Indeed due to the requirements of the travel operators’ margin scheme it is common for a group structure to be used allowing transport activities to be hived off into a subsidiary.

This gives rise to some potential peculiarities. For example if there are changes in a group CTA 2010 s 141(3)...

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