The Value Added Tax (Tour Operators) Order 1987

Time of supply

4.—(1) Sections 4 and 5 of the Value Added Tax Act 1983 shall not apply to any supply comprising in whole or in part a designated travel service.

(2) Subject to paragraphs (3) and (4) of this article, all supplies comprising in whole or in part a designated travel service shall, at the election of the tour operator making the supplies, be treated as taking place either—

(a) when the traveller commences a journey or occupies any accommodation supplied, whichever is the earlier; or

(b) when any payment is received by the tour operator in respect of that supply which, when aggregated with any earlier such payment, exceeds 20% of the total consideration, to the extent covered by that and any earlier such payment, save insofar as any earlier such payment has already been treated as determining the time of part of that supply.

(3) Save as the Commissioners of Customs and Excise may otherwise allow, all supplies comprising in whole or in part a designated travel service made by the same tour operator shall, subject to paragraph (4) of this article, be treated as taking place at the time determined under one only of the methods specified in paragraph (2) of this article.

(4) Where—

(a) a tour operator uses the method specified in paragraph (2)(b) to determine the time of a supply; and

(b) payment is not received in respect of all or part of the supply;

notwithstanding paragraph (3), the time of any part of that supply, which has not already been determined under paragraph (2)(b), shall be determined in accordance with paragraph (2)(a).