On 6 September 2019, HMRC published Revenue and Customs Brief 9, in which it explains how businesses that have paid too much VAT from 1 March 2019, as a result of an error in the Tour Operators Margin Scheme (TOMS), can correct it.
When HMRC updated its guidance on the policy on retained payment and deposits, it made an error in the TOMS (VAT Notice 709/5). It was stated, in error, that taxpayers should include all forfeited deposits and cancellation fees in TOMS calculations when in fact they should only include them in the circumstances described in Brief 9.
Any business that has accounted for too much VAT from the 1 March 2019 as a result of following HMRC’s incorrect advice in VAT Notice 709/05, may correct this by following the normal error correction procedure.
The Brief can be viewed here.