What are the indicative factors that determine whether for VAT purposes a taxpayer is acting as an agent or principal? In the travel sector it is crucial to get this right as this has a fundamental bearing on who needs to account for VAT under the tour operators’ margin (TOMS) scheme. Relying upon the legal form of an arrangement to support an agency position is unlikely to be sufficient. The substance of the arrangements, including the VAT accounting outcome of the proposed position must also be considered.
