Travel Agencies accounting, handled.
Managing bookings is your passion, not balancing books.
An accountant for travel agencies has to understand one thing most generalists never touch: the Tour Operators' Margin Scheme (TOMS), the special VAT regime that decides whether you pay VAT on your whole sale price or only on your margin. Get TOMS, agent-versus-principal status and ATOL trust accounting right and your VAT bill can be a fraction of what a high-street accountant would calculate. We're ACCA-qualified, give you a named accountant who actually knows travel VAT, and reply within 72 hours on fixed monthly pricing from £99.
What we get right for travel agencies.
- TOMS can cut your VAT to the margin only
- If you buy in travel, accommodation, car hire or transfers and resell them as principal (or as an undisclosed agent in your own name), the Tour Operators' Margin Scheme makes you account for VAT only on your profit margin, not the full ticket price. The trade-off: you can't reclaim the VAT on the bought-in services. We run the calculation both ways so you pay the lower figure.
- Agent or principal changes everything
- If you act as a disclosed agent, naming the airline, hotel or operator and earning commission, you fall outside TOMS and charge normal-rate VAT on your commission only. If you sell in your own name, you're likely inside TOMS. Getting this wrong is the single most common reason travel businesses over- or under-pay VAT. We pin down your status from your actual contracts, not guesswork.
- You don't issue VAT invoices under TOMS
- Under TOMS the VAT due isn't even known until your year-end margin calculation, so you cannot issue a normal VAT invoice for those supplies. Many travel firms get pulled up at inspection for issuing the wrong paperwork. We set your invoicing and bookkeeping up so HMRC has nothing to query.
- ATOL, ABTA and trust money kept clean
- Client money held under ATOL or in an ABTA trust account is not your turnover, and APC (ATOL Protection Contribution) is not your cost in the normal sense. We keep customer funds, bonding and your own income properly separated so your accounts, and your renewal, stand up to scrutiny.
The full picture.
01TOMS VAT calculation and year-end margin
We perform the annual TOMS calculation, splitting in-house supplies from margin-scheme supplies, applying the provisional percentage through the year and reconciling at year-end. Because VAT is charged on the margin, accurate cost allocation directly lowers your bill, we make sure every bought-in cost is captured.
02Disclosed vs undisclosed agent review
We read your supplier and customer terms to confirm whether you're a disclosed agent (commission, normal VAT), an undisclosed agent or a principal (TOMS). For mixed models, some packages as principal, some flight-only as agent, we keep the two streams separate and correctly taxed.
03VAT registration and the £90,000 question
The VAT registration threshold is £90,000 of taxable turnover (deregistration £88,000). For TOMS businesses, the figure that counts is your margin, not gross sales, a crucial distinction that can keep a high-volume, low-margin agency below or sensibly near the line. We monitor it monthly.
04Foreign currency, deposits and cancellations
Travel runs on euros and dollars and on deposits taken months ahead. We handle HMRC's foreign-currency conversion rules for tour operators, the VAT treatment of retained deposits and cancellation charges, and chargebacks, areas where errors quietly accumulate.
05Corporation tax, owner pay and profit extraction
Limited-company agencies pay Corporation Tax at 19% up to £50,000 of profit and 25% over £250,000, with marginal relief (a 26.5% effective rate) in between. We structure salary plus dividends, mindful that the dividend allowance is now just £500, to extract profit tax-efficiently.
06Bookkeeping, MTD and your software
We work in Xero, QuickBooks, FreeAgent or Sage and reconcile your merchant feeds, GDS/booking system reports and trust account. With Making Tax Digital for Income Tax arriving for sole traders over £50,000 from April 2026, we get owner-managers ready well ahead of time.
First call to filed.
- 01
Discovery
Understanding your business needs.
- 02
Solution Design
Crafting your custom accounting strategy.
- 03
Onboarding
Quick and easy integration.
- 04
Regular Rhythm
Consistent monitoring and reporting.
Guides for travel agencies
Plain-English explainers, kept current with the latest HMRC rules.
Frequently asked questions.
If you buy in travel services and resell them as principal or as an undisclosed agent (in your own name), TOMS is mandatory for those supplies, it isn't optional. If you only ever act as a disclosed agent earning commission, TOMS doesn't apply and you charge normal VAT on your commission. We confirm which camp each part of your business falls into from your contracts.
Usually yes, because VAT is charged on your margin rather than the full sale price. The catch is you can't reclaim VAT on the travel services you buy in. For most agencies the margin basis still works out cheaper, but we check both routes so you're never paying more than you need to.
For TOMS supplies, it's your margin that counts towards the £90,000 VAT registration threshold, not your gross turnover. This is a genuine quirk of travel VAT, a busy agency turning over far more than £90,000 in bookings may still sit below the threshold on margin. We track it for you each month.
Customer money you're holding before a trip departs isn't your income and shouldn't inflate your turnover. We keep trust and protected funds separate from your trading income in the accounts, and treat ATOL Protection Contributions correctly, so your figures are clean for both HMRC and your scheme renewal.
No, for supplies under TOMS you can't issue a standard VAT invoice, because the VAT isn't determined until your year-end margin calculation. We set up compliant invoicing and explain what your business customers can and can't reclaim, which avoids problems at a VAT inspection.
Fixed monthly pricing of £99, £199 or £499 depending on the support you need, on a rolling monthly basis with no long contract. You get a named, qualified accountant, replies within 72 hours, and a 30-day money-back guarantee if we're not the right fit.
It's common and we handle it routinely. Package sales as principal typically fall under TOMS, while flight-only or agency commission work is taxed under normal rules. We keep the two income streams separated in your bookkeeping so each is taxed correctly and your VAT return is right first time.
Stop overpaying tax. Start filing in 5 days.
Thirty minutes with an ACCA-qualified accountant. Most owners uncover £1,000-£3,000 in annual savings on the first call. If we are not the right fit, you walk away with a free tax review on the house.
