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rather than more money.” Some employers have


touted paying lower wages to those working mostly from home. Armstrong argues: “If you believe an organisation can only function if everyone is in the office, you need to pay for it. But what are you trying to encourage? Are you trying to punish people or trying to increase your talent base?” When it comes to hybrid


working, she says: “Some people tried to apply office work practices to hybrid or remote working, and you can’t. You need to think about how to communicate and how to onboard people.” She insists: “Previously,


flexible working was seen as ‘second tier’, offered to women who had just had children. It was a ‘privilege’ and it ruined your career. Hopefully, it will be seen more positively now. It’s a change that is going to stay.” Armstrong hails the #MeToo


movement against sexual abuse and harassment which has also transformed the world of work, saying: “In the first job I had there was soft porn on the office walls. It’s fantastic that it has become unacceptable to do things that were completely normal when I was younger.” MeToo has been “massively


positive”, she says, but adds: “There may be some unintended consequences. Some men are less likely to mentor younger women and nervous about taking women on work trips.”


Jenkins raises host of queries about new tax regime


The German tax office has given no details of how its new VAT regime will apply to UK and other non-EU travel firms. Etoa chief executive Tom


Jenkins said: “We don’t know where people register [for VAT]. We don’t know whether businesses will have


to file monthly, as is the convention in Germany. And we don’t know whether there is a minimum level. “Do the Germans have the


capacity to cope? A significant part of agents’ business is buying product and adding their own margin. Even if only a small percentage of agents will be liable, the Germans will need to address a formidable volume of enquiries. “Are people going to be able


to file in their own language? Will there be any publicity about this? No formal notice has been served.


“The first question any business


will ask is ‘Are my competitors going to comply with this?’ So how is this going to be enforced? We don’t know what penalties there will be for non-compliance. “How will the authorities follow


transcontinental intermediaries? It is possible a hotel room will be contracted by a London wholesaler, sit on a bed bank in Japan and be sold to a wholesaler in China who sells it on to a Chinese agent, all at net rates. How will the authorities follow the tax liability?”


Germany’s VAT proposal ‘seriously unreasonable’


Ian Taylor


German Federal Tax Office plans to levy VAT on sales of German travel product by non-EU tour operators threaten to make Germany “a toxic destination”. That is according to Tom Jenkins,


chief executive of European tourism association Etoa, who denounced the plans as “seriously unreasonable”. Germany announced in January


2021 that the Tour Operators’ Margin Scheme (Toms) would not apply to operators from non-EU countries, including the UK, meaning they would have to register for VAT in Germany. However, implementation was deferred – initially to January this year and then to January 2023, with the tax authority confirming its intention to push ahead in July. Jenkins said: “The implication is


that all non-EU intermediaries selling German product must register with the German tax authorities. “In effect, this will apply a sales


tax to German product. A European tour that involves any services in


54 8 SEPTEMBER 2022 Tom Jenkins


Germany will have to comply.” Speaking on an Etoa webinar,


Jenkins noted: “Toms simplifies VAT rules for operators. All they do is account for VAT on their margin in the state where they’re established, avoiding having to register for VAT in each EU state.” He warned the change “will


impose double taxation”, saying: “This is a sales tax targeting activities outside Germany when VAT is already paid on products in Germany.” Jenkins added: “The compliance costs are substantial. But it’s


not just about the money. The compliance burden is considerable. Accommodation, catering, cultural attractions, river cruises, tour guides, transportation all have different rates of VAT. It is entirely unreasonable and there is widespread ignorance of this. If implemented, this starts to make Germany a seriously toxic destination.” He advised travel companies


to “treat all 2023 programmes that include Germany with caution” and suggested they “write to suppliers, chambers of commerce, tourism offices” to let them know “the damage this will do”. VAT specialist David Bennett, a


director at Elman Wall Bennett, said: “If a UK tour operator or an agent acting in its own name sells German accommodation in the UK next year, the company will be expected to pay VAT in Germany.” He warned: “Croatia has done the


same and UK B2B operators have now registered [for VAT] in Croatia. Austria may go the same way. We’ve heard Cyprus and Portugal are considering similar.”


travelweekly.co.uk


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