Value Added Tax Act 1994, section 53

Tour operators

Part III Application of Act in particular cases

(1)The Treasury may by order modify the application of this Act in relation to supplies of goods or services by tour operators or in relation to such of those supplies as may be determined by or under the order.

(2)Without prejudice to the generality of subsection (1) above, an order under this section may make provision—

(a)for two or more supplies of goods or services by a tour operator to be treated as a single supply of services;

(b)for the value of that supply to be ascertained, in such manner as may be determined by or under the order, by reference to the difference between sums paid or payable to and sums paid or payable by the tour operator;

(c)for account to be taken, in determining the VAT chargeable on that supply, of the different rates of VAT that would have been applicable apart from this section;

(d)excluding any [F482personF482] from the application of section 43;

(e)as to the time when a supply is to be treated as taking place.

(3) In this section “tour operator” includes a travel agent acting as principal and any other person providing for the benefit of travellers services of any kind commonly provided by tour operators or travel agents.

[F483 (3A)But a person is not a tour operator if and so far as their business consists of making supplies of services consisting of the transport of passengers by private hire vehicle or taxi, unless those supplies are made in conjunction with, and are ancillary to, the making of supplies by the person consisting of—

(a)the provision of accommodation, or

(b)the transport of passengers by bus, coach, train, ship or aircraft.F483]

(4)Section 97(3) shall not apply to an order under this section, notwithstanding that it makes provision for excluding any VAT from credit under section 25.

Definitions used in section 53 5

subsection (1) above

(a) the reference in subsection (2) to “subsection (1) above” were to “subsection (1) and paragraph 24(1) of Schedule 9ZA”;

Defined in Sch.9ZA para.24(2) · see it in the full Act

(b) the reference in subsection (2A) to “subsection (1) above” were to “subsection (1) or paragraph 24(1) of Schedule 9ZA”.

Defined in Sch.9ZA para.24(2) · see it in the full Act
VAT

“VAT” means value added tax charged in accordance with this Act;

Defined in s.96(1) · see it in the full Act
business

(1) In this Act “business” includes any trade, profession or vocation.

Defined in s.94(1) · see it in the full Act
ship

“ship” includes hovercraft;

Defined in s.96(1) · see it in the full Act
the credit

(4A) Subsection (3) above shall not require any such amount as is mentioned in paragraph (a) of that subsection (“the credit”) to be set against any such sum as is mentioned in paragraph (b) of that subsection (“the debit”) in any case where—

(a)an insolvency procedure has been applied to the person entitled to the credit;

(b)the credit became due after that procedure was so applied; and

(c)the liability to pay the debit either arose before that procedure was so applied or (having arisen afterwards) relates to, or to matters occurring in the course of, the carrying on of any business at times before the procedure was so applied.

Defined in s.81(4A) · see it in the full Act

Cases considering section 53 5

The Commissioners for HMRC v Bolt Services UK Limited

[2026] EWCA Civ 720 · 12 June 2026Interprets

Section 53 was identified as the domestic enabling provision for modifying VAT treatment of tour-operator supplies. The court treated the UK legislation as requiring construction conforming with the Principal VAT Directive. (see paras [15]-[17]) The reference to services commonly provided by tour operators or travel agents supported an actual comparability assessment. It did not extend the scheme to services outside the relevant sector merely because they involved passenger transport. (see paras [17], [63]-[68])

Secret Hotels2 Ltd v HM Revenue and Customs

[2012] EWCA Civ 1571 · 3 December 2012Interprets

The court reads section 53 with Article 26(1) to identify the statutory questions: whether the person is a tour operator and whether it supplies a designated travel service. Those questions are closely linked and essentially factual. (see paras [35]-[43]) The court confirms that the 1987 Order was made under the statutory power to modify the application of VAT law to tour operators. (see paras [7]-[8]) The court confirms that tour operator includes a travel agent acting as principal and other persons supplying services commonly provided by tour operators or travel agents. The definition is not exhaustive and must be read with Article 26(1). (see paras [7], [38]-[40])

The Commissioners for HMRC v Bolt Services UK Limited

[2025] UKUT 100 (TCC) · 24 March 2025Defines

Section 53 provides the statutory power for the Treasury to modify VAT treatment for tour operators and defines “tour operator” to include a travel agent acting as principal and others providing services commonly provided by tour operators or travel agents. The Upper Tribunal construed the provision consistently with the Principal VAT Directive (see paras [10], [13]-[17], [47]).

What each judgment says about section 53 is in the case-law panel in the full Act.

Amendments and notes

2 notes from legislation.gov.uk

Amendments

  1. F482Word in s. 53(2)(d) substituted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 11; S.I. 2019/1348, reg. 2
  2. F483S. 53(3A) inserted (with effect in accordance with s. 82(2) of the amending Act) by Finance Act 2026 (c. 11), s. 82