24 Apr Is your event legal? Moving Equipment, People & Money Across Borders — What You Need To Know
We often get asked by our clients if there are any ways in which we can reduce costs. Whilst in some cases there are things we can remove to suit your budget, there are some things we can’t, whether we like it or not. These fixed costs are often things that keep us legal and ensure you as our client has the most protection we can offer.
Operating in Europe comes with many challenges including keeping up with legislation changes that make moving kit across borders for events harder than ever.
Whether we’re transporting bikes, protecting your money or paying the right tax, there are critical legal requirements all tour operators should be following that you need to know about. Breaching them can lead to delays, fines, seizure of equipment or worse, cancellation of your event.
For example, recently a group of riders raising funds for a cancer charity were found not to have the necessary customs documentation and were subject to a fine of €8,500 payable on the spot. The risk of not paying is the seizure of their bikes.
Here is a checklist of things you should ask your operator to make sure your event is fully compliant.
1. ATA Carnets — The “Passport” for Your Equipment
If you’re taking commercial goods (temporarily) from the UK into the EU or beyond — you’ll need an ATA Carnet.
What is it?
A customs document that allows duty-free and tax-free temporary movement of goods.
When is it used?
Typically used for event equipment, bikes, sports kit etc. More broadly it is also used by touring bands for their equipment and touring art collections.
What happens if you don’t have one?
- Hefty fines
- Seizure of goods at the border
- Significant delays
- Potential tax/duty charges on the value of your kit
More information about ATA Carnets can be found here.
2. Operator Licences (O Licence) — Moving Equipment By Truck
If you’re transporting equipment in a vehicle over 2.5t for commercial purposes (hire and reward) — you need an O Licence.
Types:
- Restricted O Licence — UK only
- Standard International O Licence — UK & EU
Legal Risk:
Driving a vehicle over 3.5t in the EU without a valid O Licence is illegal.
More information about O Licenses can be found here.
Penalties include:
- Hefty fines
- Vehicle seizure
- Licence revocation
- Loss of contracts/insurance issues
This is why we work with a freight company to transport bikes to and from the EU.
3. Protecting Client Money — Trust & Transparency
In the UK, tour operators must comply with several legal requirements when it comes to handling client’s money. These regulations are in place to protect consumers and ensure that operators maintain proper financial practices. If your operator is packaging several elements together such as accommodation and travel etc, they must by law protect your money. There are a number of ways of doing this. We have chosen membership of ABTOT. ABTOT operates a regulated financial protection bonding scheme for Travel Organisers who need to comply with the UK Travel Regulations.
If the tour operator doesn’t have this in place, you are liable to the following risks:
- Loss of money if the operator enters insolvency.
- No guarantee of refunds or alternative arrangements.
- Unclear or unfair terms and conditions.
- Lack of consumer recourse.
- Hidden costs and poor quality services.
Best Practice:
- Check for trust account or ABTA protection.
- Review terms and conditions.
- Ask about client money protection.
Further information can be found here.
4. TOMS VAT
TOMS = Tour Operators Margin Scheme
What is TOMS?
The Tour Operators’ Margin Scheme (TOMS) is a special scheme for Tour Operators. It replaces the normal VAT rules and must be used where any UK business buys in and resells services including accommodation, passenger transport, transport hire, trips or excursions, services of tour guides, etc.
What is the Impact?
- Unlike VAT, TOMS cannot be reclaimed by companies or charities.
- VAT applied to this margin is at the standard rate when the tour is enjoyed in the UK, and zero rate when enjoyed outside the UK.
- It is calculated on the entire margin scheme supplies of the business at the end of each year, so it is not possible to accurately calculate the amount of TOMS applicable to any single event.
Detailed guidance can be found on HMRC’s website at Tour Operators’ Margin Scheme (VAT Notice 709/5) – GOV.UK.
We continuously work with trusted transport companies, advisors, and lawyers to keep up to date with the latest changes in law and most importantly, to keep us legal.
If you’d like help navigating any of this, please get in touch with us today.
