The boss of one of the UK’s only bed bank to have adopted principal status right from the start, has fired a warning shot to rivals that there will be “difficult times ahead”.
Commenting on the recent case between HMRC and Medhotels, Youtravel group managing director Graham Nichols said: “To be an agent in this business, from a VAT point of view, is a lot more difficult than people thought.
“Our position is that we have always acted as the principal from the outset, paying our TOMS (Tour Operators’ Margin Scheme) VAT which was annoying when most of our rivals weren’t.
“But I actually think that some of our competitors may have a difficult time ahead because HMRC is really looking at it closely. I predict a lot of changes over the next 12 months and quite a few issues,” he said.
Commenting on Youtravel’s new Middle-East based shareholder following Barclays Capital’s decision to scale down its venture capitalist interests, Nichols said: “The deal was done amazingly quickly, in about three weeks.
“It doesn’t mean that we’re suddenly awash with cash, but it does mean we should have enough for our needs. I have had a lot of people phone me, asking us to buy them, but that’s not on the agenda just yet.”
Nichols said the focus would be on growing its international business, which currently accounts for about 15% of revenues.
“The margins are better, so part of our strategy is to seek to grow that,” he said.
Asked about the state of the current market, Nichols said: “We’d all like the market to improve and we hope that it will. It’s all very short-term and we are all hoping for that surge. But if you think things are really bad in travel, at least you’re not working for BP.”