The same trip, if VAT were charged on top of the whole selling price instead.
| Margin scheme | VAT on the full price | |
|---|---|---|
| VAT | €173.55 | €1,050.00 |
| Client pays | €5,000.00 | €6,050.00 |
| Your profit | €826.45 | €1,000.00 |
An estimate per booking. On a real margin scheme return, margins can be netted across the VAT period, and services you supply yourself (your own coaches or guides) are taxed normally — check your own treatment with an accountant.
The client pays your selling price and nothing is added on top. The VAT is the share of your margin that belongs to the tax office:
margin = selling price − net costVAT = margin × rate ÷ (100 + rate)profit = margin − VATThe example loaded above is a €4,000 trip — hotels, private guides and transfers — sold at a 25% markup for €5,000. Its €1,000 margin holds €173.55 of VAT at 21%, so you keep €826.45. Charge 21% on the full price instead and the client would pay €6,050.
Each line is worked out and rounded to the cent on its own, and a line sold at a loss carries no VAT — the same way the Deer Track itinerary builder calculates it on every quote, so the figure you see while pricing is the figure on the trip. Your VAT return may net margins across the whole period; ask your accountant how your country handles it.
Not sure whether to quote in markup or margin? The markup & margin calculator converts between them, and the tour price calculator prices a whole itinerary per person.
VAT is charged only on your margin — the selling price minus what suppliers charge you — and it sits inside the price. VAT = margin × rate ÷ (100 + rate). A trip costing €1,000 sold for €1,250 has a €250 margin; at 21% VAT that holds €250 × 21 ÷ 121 = €43.39 of VAT, leaving €206.61 profit.
TOMS (Tour Operators' Margin Scheme) is the UK's version of the margin scheme. EU countries apply the same idea under the special scheme for travel agents in the VAT Directive. It applies when you buy travel services from other businesses and resell them to travellers in your own name.
No. The client pays your selling price and the VAT is already inside it. You do not show VAT separately on the invoice to the traveller — Deer Track invoices carry the note “Margin scheme — travel agents (Art. 306, Directive 2006/112/EC)” instead of a VAT line.
A line with no margin carries no VAT. This calculator, like the Deer Track builder, works per line, so a loss on one line does not reduce the VAT on another. On your actual return, margins can be netted across the VAT period, which can lower the total.
Services you provide yourself — your own coaches, your own employed guides — are taxed under the normal rules, not the margin scheme. Mixed trips need splitting. Rules and rates differ by country, so treat the calculator as an estimate and check your own treatment with an accountant.
For resold travel it is usually the only option, and it keeps your prices lower: on a €5,000 trip with a 25% markup at 21%, the margin scheme holds €173.55 of VAT inside the price, while VAT on the full price would add €1,050 on top.
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