VAT payable on the transportation costs with zero VAT

Hi, My company is a tour operator business to provide the guide tour services for clients. The costs consist of cleints meal and admission tickets with VAT, and transportation which the coach company invoice with 'zero' VAT. Does the output VAT 20% of total sale invoice amount deduct the input VAT of meal cost and admission ticket fee to come out the VAT payable? The sale amount includes a cost element of transportation cost. Can I reduce the transportation cost from the sale amount before the calculation of the out VAT? it would reduce the VAT payable. Is there any advice for the treatment of the 'zero' VAT transportation costs in calculation of VAT payable? Thank you.

Hi,

You can find guidance on the workings for your purchases and sales under the Tour Operator Margin Scheme here:

Tour Operators Margin Scheme (VAT Notice 709/5)

Thank you.

Hi, Thank you for your guidelines.