CalculatorsVAT2026/27

TOMS VAT Calculator. Your margin and the VAT on it.

Your margin under the Tour Operators' Margin Scheme, split between travel enjoyed in the UK and travel enjoyed outside it, and the VAT on it, with HMRC's own step numbers from VAT Notice 709/5.

Your details
£

VAT-inclusive selling prices of the packages supplied in your financial year. Enter only the costs that relate to these sales below.

£

Hotels, transport, excursions and guides you buy in and resell, enjoyed in the UK. Use the VAT-inclusive purchase price for these sales.

£

The same, for travel enjoyed outside the UK. The EU counts as outside the UK. Use the VAT-inclusive purchase price for these sales.

£

Only the in-house parts of the packages above: direct costs of what you provide yourself in the UK, such as your own guide. Leave at zero if you only resell. The calculator adds 20 per cent, as step 4 requires.

£

The provisional output VAT on these sales in Box 1 of your returns for the year, before input tax. A provisional credit goes in as a negative number. Leave at zero to see the year's VAT on its own.

Output VAT for the year (step 30)
£10,000.00
  • Total margin (step 11)£240,000.00
  • UK margin, standard-rated (step 12)£60,000.00
  • Margin outside the UK, zero-rated (step 13)£180,000.00
  • VAT on UK margin (step 20)£10,000.00
  • Value of the supplies, excluding VAT (step 29)£230,000.00
  • Adjustment to pay (step 32)£2,000.00
  • Provisional percentage for next year (section 10)5.00 per cent

Illustrative only, not tax advice. It follows the cost-based calculation in VAT Notice 709/5 for a simple case: bought-in travel and UK in-house supplies, with no market value method, agency supplies, reduced or zero-rated in-house supplies or exempt supplies. Your real figures come from your contracts and your records.

Get TOMS set up properly

The standard rate is 20 per cent. The VAT fraction is one-sixth because the margin already includes VAT. Section 9 splits the margin in proportion to costs, not by each booking's own margin: if bought-in UK travel is 30 per cent of the step 10 total, step 12 gives it 30 per cent of the margin. Read our TOMS guide, with a full worked year-end calculation.

What does this TOMS VAT calculator do?

This calculator estimates VAT under the Tour Operators' Margin Scheme using package sales and direct costs. It splits the total margin between bought-in travel enjoyed in the UK, travel enjoyed outside the UK and any standard-rated UK in-house supplies. It shows the output VAT, the VAT-exclusive value of the supplies, the year-end adjustment and next year's provisional percentage.

Enter VAT-inclusive sales and bought-in costs. Enter your own in-house direct costs excluding VAT: step 4 adds 20 per cent. Leave optional inputs at zero if they do not apply. Use annual totals for a year-end illustration. A booking estimate does not replace the annual calculation.

It does not cover the market value method, agency supplies, reduced-rated, zero-rated or exempt in-house supplies, or in-house supplies outside the UK. It does not decide whether your contracts fall within TOMS. Where a market value is available for in-house supplies, paragraph 5.3 says that method should in principle be used, subject to its cost-based exception.

Which HMRC steps does it use?

The method follows VAT Notice 709/5, section 9. Sections 9 and 10 have the force of law. Other steps are treated as nil in this limited calculation.

StepWhat it is
1VAT-inclusive package sales.
2 and 3VAT-inclusive bought-in travel costs, split by UK and outside UK enjoyment.
4Standard-rated UK in-house direct costs, excluding VAT, plus 20 per cent.
10 and 11Total costs, then sales less those costs to find the margin.
12, 13 and 14Margin allocated to each category in proportion to its costs.
20UK bought-in margin multiplied by one-sixth.
21Step 4 plus step 14, multiplied by one-sixth.
23, 24 and 25VAT-exclusive UK margin, outside UK margin and in-house sales value.
29Sum of those VAT-exclusive values.
30, 31 and 32Total output VAT, provisional VAT already accounted for, then the difference.
Section 10, steps 1 and 2Add steps 4, 12 and 14, divide by sales and multiply by 100.

Why is the margin split by cost share?

Paragraph 5.2 apportions the total margin using direct costs, excluding overheads. Its example says that if standard-rated Margin Scheme costs are 30 per cent of total direct costs, 30 per cent of the margin is standard-rated. This assumes the same percentage margin across the elements. It does not use each booking's separate margin.

Since 2021, the margin is standard-rated for travel enjoyed in the UK and zero-rated outside the UK, including the EU. Paragraph 4.8 sets out that treatment. In-house supplies retain their own VAT treatment.

Why is the VAT fraction one-sixth?

The standard VAT rate is 20 per cent. The margin already includes VAT, so the tax is 20 divided by 120, or one-sixth. VAT Notice 700, paragraph 7.3.1 explains the fraction. These references were checked on 21 October 2026. Calculations keep full precision; displayed amounts are rounded to pence.

What does the worked example show?

Illustrative example, not a real business. These are the figures the calculator opens with. For the year to 31 December 2026, a tour operator sells packages for £1,200,000. The travel it bought in cost £240,000 for trips enjoyed in the UK and £720,000 for trips enjoyed outside the UK. It has no in-house supplies.

Total costs are £960,000, so the margin is £240,000. UK travel is 25 per cent of costs, so £60,000 of the margin is standard-rated and £180,000 is zero-rated. The VAT on the UK margin is one-sixth of £60,000, which is £10,000. The operator accounted for £8,000 of provisional output VAT during the year, so the adjustment is £2,000 to pay. Next year's provisional percentage is £60,000 divided by £1,200,000, or 5 per cent. This is the same example our TOMS guide works through step by step.

How do provisional returns and exceptions work?

Each VAT period uses a provisional percentage under section 10. The year-end calculation corrects the provisional amounts. A negative margin still calculates here, but the real adjustment runs on the year's totals. The calculator needs sales and at least one bought-in travel cost: what you provide yourself, sold without any bought-in travel, is outside TOMS and taxed under the normal rules (para 2.13).

If everything you sell is standard-rated, paragraph 5.5 requires the simplified calculation in section 11 instead. It gives the same answer for that case. VAT Notice 709/5 was last updated on 18 April 2024. Since 2 January 2026, standalone taxi and private hire transfers are outside TOMS under VAT Act 1994 s53(3A).

Related guides

Frequently asked questions

How does the calculator split the TOMS margin?

It deducts the included direct costs from sales, then allocates the total margin in proportion to those costs. Bought-in travel enjoyed in the UK has a standard-rated margin. Travel enjoyed outside the UK, including the EU, has a zero-rated margin.

Why does it use one-sixth instead of 20 per cent?

The margin already includes VAT. At a standard rate of 20 per cent, the VAT element is 20 divided by 120, which is one-sixth.

Can I include my own guide or UK accommodation?

Yes, where these are standard-rated UK in-house supplies valued using the cost-based method. Enter their direct costs excluding VAT. The calculator adds 20 per cent at step 4 and calculates VAT on that amount plus the allocated in-house margin.

Does a booking estimate replace the annual TOMS calculation?

No. VAT periods use provisional amounts and the year-end calculation corrects them. A booking estimate is illustrative. Negative margins are calculated, but the real adjustment uses the whole year. If all supplies are standard-rated, the simplified calculation in section 11 is required.

Are standalone taxi and private hire transfers covered?

No. Since 2 January 2026, standalone taxi and private hire transfers are outside TOMS under VAT Act 1994 s53(3A). Do not include those supplies in this calculator.