Explanatory note

This Order amends, with effect from 1st May 1990, articles 5 and 10 of the Value Added Tax (Tour Operators) Order 1987.

Article 3(a) of this Order amends article 5(3) of the principal Order determining the place of supply of passenger transport. The rule for transport is extended to apply to services ancillary to that transport. New article 5(3A) of the principal Order deems certain passenger transport services performed outside a country to be performed in that country.

Article 3(c) of the Order applies the place of supply rule for passenger transport to pleasure and similar cruises.

Article 4 of this Order amends article 10 of the principal Order. Article 10 relieves from tax that portion of the value of a tour operator’s designated travel service which is attributable to elements of the supply, being certain services which, but for the principal Order, would not otherwise be taxed. Such apportionment is applicable only to designated travel services which include the transport or education services described in article 10.