Customs & Excise v First Choice Holidays Plc

Customs & Excise v First Choice Holidays Plc

The sum paid by the travel agent to the tour operator to make up the discount is part of the consideration for the supply to the traveller and must be included in the taxable margin under Article 26(2) of the Sixth Directive. Domestic legislation and guidance can and must be interpreted purposively to conform with this requirement, even if the language appears to focus on the amount paid by the customer alone.

Parties
Appellant: Commissioners of Customs & Excise; Respondent: First Choice Holidays PLC
Jurisdiction
England and Wales
Judgment Date
29 July 2004
Procedural Posture
Civil Appeal / Court of Appeal Judgment After Reference to European Court of Justice
Outcome
appeal allowed
Legal Topics
VAT, Interpretation of EU Directives, Tour Operators Margin Scheme, Agency Law, Statutory Construction
Tax Law European Union Law VAT Interpretation of EU Directives Tour Operators Margin Scheme Agency Law Statutory Construction

Case Brief

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Parties

Commissioners of Customs & Excise

Appellant

First Choice Holidays PLC

Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment After Reference to European Court of Justice

Legal Issues

  1. 1 How should the cost of a package holiday be assessed for VAT under the Tour Operators Margin Scheme (TOMS)?
  2. 2 Does the 'total amount to be paid by the traveller' under Article 26(2) of the Sixth Directive include sums paid by travel agents to the tour operator to make up discounts?
  3. 3 Can domestic UK legislation and guidance be interpreted in conformity with the Sixth Directive as interpreted by the European Court of Justice?

Ratio Decidendi

The sum paid by the travel agent to the tour operator to make up the discount is part of the consideration for the supply to the traveller and must be included in the taxable margin under Article 26(2) of the Sixth Directive. Domestic legislation and guidance can and must be interpreted purposively to conform with this requirement, even if the language appears to focus on the amount paid by the customer alone.

Court Disposition

appeal allowed

Orders

  • The appeal is allowed.