p14 ETOA conf nov21 19/11/08 16:44 Page 14
news conference report
ttglive.com
Etoa Conference 2008
November 6 ■ Copthorne Tara Hotel, Kensington, London
The European Tour Operators’ Association aims to simplify Toms. By Kay McLellan
EC warned over
flight ‘packages’
‘Ease VAT pain
THE CURRENT review of the European Package
Travel Directive should take account of airlines
for operators’
selling hotels with flights.
Frank Brehany, of consumer watchdog Holiday
Travel Watch, said: “The directive should be
strengthened. Those that think they can pick off
products and trick consumers into thinking they
Etoa wish list: Toms overhaul
are buying a package are kidding themselves.
“The elephant in the room is airlines selling ■ Business to business suppliers given the
flights and hotels without regulation. But does option to not fall under Toms
the EU and UK government have the courage to Etoa’s Tom Jenkins aims to sort out anomolies in Toms scheme ■ VAT not charged on EU travel sold to
confront the Willie Walshes of this world?” non-EU customers
The Package Travel Directive was introduced PROPOSALS to iron out inconsistencies in VAT ■ Simplification of the VAT calculation with EU
in 1991 before the rise of no-frills airlines and laws under the Tour Operators’ Margin Scheme states given the option to use a fixed margin
dynamic packaging. The decline of the traditional (Toms) have been drawn up in anticipation of ■ A standardised list of travel products, such
package means up to 50% of flights made by new EU negotiations. as car hire, that falls within Toms in the EU
Britons fall outside the directive’s range. Toms, which protects operators from having to ■ Clarification that Toms applies to both
Anders Dolling, legal adviser at the European register for VAT in other member states of the EU, single services and packages
Commission, said the situation in the UK was has not been changed since it was set up in 1977. ■ Operators to also pay the local rate of tax
different from other European countries. It has been criticised for unfairly penalising for products in countries with preferential
“Scrapping the directive is not an option. The tour operators, forcing businesses offshore and rates of VAT for travel products
whole discussion is very UK-centred: the market harming inbound tourism.
looks very different abroad,” he said. The European Tour Operators’ Association, at
“We should clarify it and see to it that the request of the European Commission, has lic, the next holder of the presidency, will take up
everyone plays under the same conditions.” now drawn up proposals designed to make the the matter.
scheme more flexible. Tom Jenkins, executive director of Etoa, said:
One of the proposals (see box) is that business “VAT and Toms has caused systematic damage to
Purge on price-fixing
to business suppliers, such as bed banks, could Europe as a destination over the last 25 years.
fall outside of Toms. “This is not a document that tries to solve all
THE EUROPEAN Tour Operators’ Association was Currently bed banks avoid the problems. We are just trying
told ignorance of competition law was no excuse Toms by saying they are agents to sort out the major anomalies
to avoiding prosecution. of hotels, and last week for our members.”
Neil Baylis, EU competition partner at solici-
Youtravel.com indicated its move Etoa adviser David Bennett,
tors K&L Gates, warned delegates that regulators to non-principal status depended VAT partner at accountants
were growing in size and confidence when on it being given assurances Saffery Champness, said: “There
tackling firms that infringe price-fixing laws. from Revenue & Customs about is no desire to see an end of
He said fines could be up to 10% of a firm’s proposed changes to Toms. Toms. We want it to work in a
turnover. He highlighted the British Airways and Any changes depend on the more uniform manner and see
Virgin Atlantic price-fixing scandal, which saw holder of the EU presidency unfair practices come to an end.”
British Airways fined $300 million. putting Toms on its agenda and The proposals were also
“Regulators are not going to hold back when receiving unanimous agreement worked on by Abta and other
imposing fines, especially on those with deep from all 27 member states. European travel agent and tour
pockets,” he warned. It is believed the Czech Repub- David Bennett: end unfair practices operator associations.
14 21.11.2008
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