OHG creditors set to receive payment Ian Taylor


The liquidator of On Holiday Group (OHG) is preparing to disperse funds to creditors, mainly hotel partners of the former bed bank, 10 years after the company ceased trading. This follows a decade of wrangling


with tax office HMRC over VAT payments totalling £3.6 million under the Tour Operator Margins Scheme (Toms) taken in 2010 and not repaid until September 2021. The dispute stemmed from


HMRC’s pursuit of Toms VAT from bed banks which it deemed to be acting as ‘principals’ in the sale of holiday accommodation, rather than as ‘agents’ of the suppliers, and liable


to pay VAT on the margin they made. In OHG’s case, HMRC sought


back payment of Toms VAT on four years’ turnover. This, in turn, followed HMRC’s pursuit of £7 million in Toms VAT from bed bank Medhotels – later rebranded Secret Hotels and acquired by Thomas Cook. The Medhotels case went all the


way to the Supreme Court where HMRC lost in a ruling in 2014 after differing judgments had been delivered at each stage of the legal process to that point. But the tax office continued to pursue bed banks for Toms VAT up to March 2020 when it decided against an appeal to the European Court of Justice. OHG ceased trading in 2014, with former chief executive


Travel Counsellors remains committed to Holidaysplease


Juliet Dennis


Travel Counsellors has pledged its long-term commitment to Holidaysplease a year after its acquisition, although fewer than half the original number of its agents are still trading under the brand. Travel Counsellors bought


the Birmingham-based business, comprising Holidaysplease, The Holiday Franchise Company and its support business, in March 2023. Former directors Charles Duncombe, Richard Dixon and Sonia Dixon left earlier this month. Holidaysplease now has about 30 agents trading under its brand


6 21 MARCH 2024


compared with just under 100 a year ago. About 55 have moved across to become travel counsellors, while about 10 have left. There are 50 agencies in The


Holiday Franchise Company and 40 support staff. Travel Counsellors chief executive


Steve Byrne said 90% – about 90 –of the original Holidaysplease agents were still working within the Travel Counsellors ‘umbrella’, stressing: “We bought it because of the people.” He said: “We’re delighted at


where we are 12 months in, and with the retention of people. It’s trading well. It was always going to be a long-term investment.”


The business was


destroyed overnight. But it would not have gone bust without the VAT claim


Steve Endacott declaring HMRC “destroyed the business”. But the OHG liquidators only managed to secure repayment of the VAT in 2021 – in two payments, including some interest, one for £2.7 million and another for almost £1.19 million. Endacott described the outcome


as “a sorry mess” but told Travel Weekly: “The money should now begin to flow to hoteliers.”


He said the Toms bill “took all our


cashflow and eroded our model. The business was destroyed overnight. But it would not have gone bust without the VAT claim.” Endacott added: “HMRC refused to repay the money or even to discuss it until the Medhotels case was resolved.” OHG reported owing more than


£8 million in excess of its assets, including the £3.6 million held by HMRC, when it ceased trading. Creditors are in line to share


about £2.2 million, well below the more than £13 million submitted in claims. This is what is left of the VAT after payment of close to £1 million in fees to the liquidators and tax experts and an undisclosed amount in settlement of a claim by Endacott.


Steve Byrne


Byrne said he viewed all agents as


part of the wider Travel Counsellors group. He said: “We lost a few and recruited a few within Holidaysplease and Travel Counsellors. The key thing for us is retaining talent under the Travel Counsellors umbrella – whether they trade as Holidaysplease or Travel Counsellors is up to them. “They are all part of the Travel


Counsellors community. We want to make sure that they are happy and supported.” Byrne said it had been vital to win


the “hearts and minds of the people”, adding: “We would have loved to have kept everyone.” The deal has allowed the group


to take on agents requiring generated sales leads, not offered under Travel Counsellors, and those who want to set up their own branded agency under The Holiday Franchise Company, he added. Byrne predicted further growth of the business and the number of agents. “I see it carrying on growing and recruiting, like we do in Travel Counsellors,” he said, adding: “We look at what a potential recruit wants and do we have a solution to meet their needs.” Future growth of the Travel


Counsellors group would be mostly organic, he said, but further acquisitions have not been ruled out.


travelweekly.co.uk


PICTURE: Sarah Lucy Brown


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