VAT case for bed banks nears a conclusion - or does it?

HMRC has apparently lost its latest challenge in a long running VAT case involving the VAT treatment of bed banks. HMRC have argued in the courts that bed banks are principals and must therefore use the tour operators' margin scheme (TOMS for short) to calculate their VAT. Bed banks have held that they are agents and therefore not subject to TOMS. Using TOMS would mean they pay a lot more VAT.

HMRC has lost in cases it has taken against Opodo, Alpharooms, HotelConnect, Hotels4u and Lowcost Holidays. These cases followed HMRC's loss in the Secret Hotels 2 Ltd (formerlly known as Med Hotels Ltd) case.

The tribunal has ruled that HMRC cannot appeal to the Court of Justice of the European Union in a final last ditch attempt to secure a win. However HMRC has 2 months to appeal against this ruling and I think it highly likely it will put in an appeal.