Is there VAT on holidays, as it may be cut soon?

acjc

Was thinking about booking a holiday for next year about now, but if VAT is cut soon and applies to holidays, I should put it off until then, since it's one of the few high cost items I buy.

Does anyone know if VAT applies to package holidays? Or to flights and hotel bookings separately?

Titan_Uranus

acjc wrote: »

Was thinking about booking a holiday for next year about now, but if VAT is cut soon and applies to holidays, I should put it off until then, since it's one of the few high cost items I buy.

Does anyone know if VAT applies to package holidays? Or to flights and hotel bookings separately?

Yes VAT is paid on holidays. The cut is likely to be 2.5%, so you would save £12.50 on £500 spend.

pennylane99

Flights are zero vat, also at the moment the cut in VAT rate may not be across the board on everything..will have to wait until the announcement tomorrow

acjc

Thanks for the info.

Oh well, there was I hoping that the whole cost of a holiday would fall by 2.5%. But if flights are excluded, then there probably won't be much of a saving, and I expect the holiday companies might not pass it on since they may have already printed brochures with set prices etc. They were quite willing to impose fuel surcharges this year on top of their brochure prices, but the cynic in me thinks they won't pass on a VAT rebate or indeed a fuel rebate (given how far the oil price has fallen recently).

dzug1

As lgilite says, VAT is only payable on what is essentially the tour operator's charge/markup for putting the thing together - flights, overseas hotels, etc, are not chargeable to UK VAT. Local taxes maybe.

Moonchild

Vastly simplified.

If you are travelling outside the EU, you may pay zero VAT if you book with a Tour Operator. However if they sell to a Travel Agent either the TA or the TO might pay VAT on the Tour Operators commission. However, this might reflect 2.5% of 10%, or, not a lot.

The Tour Operators Margin Scheme is zero rated as you pay overseas VAT for holidays outside the EU where no goods are services are from within the EU.

For holidays within the EU, someone else can explain that!

alanrowell

If you see a good deal today - BOOK IT - as the savings on reduced VAT (which will be £2.10 per £100 NOT £2.50) are minimal compared to the cost of a good deal

moneypooh

Probably do better booking through a cashback website rather than rely on VAT reductions.