First Choice Holidays and other tour operators were today celebrating a VAT tribunal decision that will lead to a multimillion pound windfall for the sector. Last week's tribunal ruled that package-holiday discounts granted by travel agents - often without the knowledge of the tour operator - could be deducted from the operator's turnover for VAT purposes. First Choice was supported by rivals Airtours, Thomas Cook and Thomson Travel. Group finance director David Howell said: 'First Choice is extremely pleased that the tribunal appeal found in our favour. 'It is very good news for vertically integrated tour operators.' KPMG advised the company and Chris Fyles, director of the firm's travel industry VAT team, said: 'This is a great victory for the tour operators who will now receive refunds for the VAT they have overpaid. 'Customs had argued that VAT should be calculated according to the holiday price advertised in the brochure, but the tribunal decision has proved the point that VAT cannot be levied on a price higher than that paid by the customer. 'Many operators have lodged claims in advance of this ruling and any who have not we advise to to do so.'
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