UK passengers charged on price drop

[RDC1]

Inland revenue would have a field day if the gratuities were bundled into the fare in the UK.

 

Optional gratuities are not subject to tax if paid outside the UK.

 

Compulsory gratuities are taxed regardless of who they go to.

 

NCL get around this by stating that the drinks package and the gratuities are a free gift.

 

Keep in mind that they would be considered revenue to the cruise line, and payments to staff would be considered expense so it would not impact the tax paid by the cruise line, only the personal income tax and retirement taxes paid by the staff in their native countries. It would also show up in the reported margin of the cruise line because both revenue and expense would go up by the same amount resulting in a lower net margin which might impact stock price in a negative way.

[caribill]

 

I see no reason why anyone should not tell reception that they are deducting say $7.86 from their daily auto-gratuities because UK/US booking conditions are not equal and they have calculated that this will put things back to equitable. This is a way that the message will be relayed upwards and if enough people did it they might well change the rules eventually.

 

A company will change what is necessary if it affects their bottom line.

 

But gratuities that are distributed to waitstaff and cabin stewards do not affect the cruise line's bottom line. They only affect what the waitstaff and cabin stewards earn.

[john watson]

A company will change what is necessary if it affects their bottom line.

 

But gratuities that are distributed to waitstaff and cabin stewards do not affect the cruise line's bottom line. They only affect what the waitstaff and cabin stewards earn.

 

The effect is indirect, if enough passengers behave in a certain way causing the staff to react in a way that is not conducive to continue to trade effectively the cruise line will change. In the UK particularly years ago trades unions had a major effect in changing company policy. I am not commenting on whether this is good or bad simply that it happens and change occurs. A while back on P&O, the cruise line had increasingly large numbers of cruisers who decided they would not pay any tips at all. The proportion of passengers became so large that eventually the crew more or less stopped working mid cruise. There were so many stopping work, the cruise line had to rethink their policies and introduced autogratuities to try and redress the balance. It is all about how many people do something collectively and whether this disrupts the business sufficiently.

 

Regards John

[anniegb]

I thought this was due to laws in your country? Dont you have advantages we dont? Such as recovering your monies after final payment if you cancel? Except deposit?

 

This untrue statement is repeated all the time. There is no legislation. If someone can post a link to support this myth I would love to read it.

 

 

 

Annie

[ollienbertsmum]

I rant about having different terms and conditions in UK and Australia from USA, at every opportunity I get. It seems so unfair.

 

However..no one appears to take the slightest notice !!!

 

The only way to change things is to vote with your feet and cruise with a different company...which one I'm not sure.

 

Sadly I am not ready to 'jump ship' at the moment.

 

I have booked on RCL and NCL and it seems the same situation - we get usually get directed to the UK system and we are told that we get extra protection so the booking conditions are different. Not sure about other lines, but I suspect it is the same.

 

I once tried to by-pass the system and book through a US online agent. I explained that I lived in Europe and the agent said it was not a problem. We established the cruise I wanted and spent a good few days looking at options. I was going to save a bundle and I would have been happier with the chance to get price drops.

 

Then I gave more details and the agent just said "can't do it". I was probably dealing with an inexperienced agent, but it was frustrating!!

[anniegb]

I have booked on RCL and NCL and it seems the same situation - we get usually get directed to the UK system and we are told that we get extra protection so the booking conditions are different. Not sure about other lines, but I suspect it is the same.

 

I once tried to by-pass the system and book through a US online agent. I explained that I lived in Europe and the agent said it was not a problem. We established the cruise I wanted and spent a good few days looking at options. I was going to save a bundle and I would have been happier with the chance to get price drops.

 

Then I gave more details and the agent just said "can't do it". I was probably dealing with an inexperienced agent, but it was frustrating!!

 

Keep looking for another US agent.

 

I price and book my cruises via US, UK and European agents.

 

It all depends upon the price and perks each offers.

 

Annie

[leck57]

I rant about having different terms and conditions in UK and Australia from USA, at every opportunity I get. It seems so unfair.

 

However..no one appears to take the slightest notice !!!

 

The only way to change things is to vote with your feet and cruise with a different company...which one I'm not sure.

 

Sadly I am not ready to 'jump ship' at the moment.

 

I'm with you all the way.

 

Later posts from yours that I have quoted above have got into the legalities of refundable deposits blah blah but we can keep this simple. The bottom line is that people in the US get far better prices and usually much better perks. I frequently read that people get up to $600 OBC on a fairly short cruise. Best you get here is around $200 and we never ever get a chance at a sip and sail/included beverage package.

 

Good luck to those in the US and I'm not hoping there are any changes to the deals you get but I wish for a level playing field.

Rant over.

[cshellz]

I’ve a booking on Carnival Horizon booked via a UK TA.

My booking has had so many price drops which I’ve not been eligible for because it’s booked via UK. It’s so frustrating on roll calls to read of the savings everyone is getting.

 

 

Sent from my iPhone using Forums

[anniegb]

Not quite, in the UK they are covered by the package travel regulation 1992 (and later revisions) that means that they get protections in some cases if the cruise line fails to produce the described vacation (major deviation vs minor deviation as defined in the regulation). This does provide some additional cost and risk to the cruise lines for sales in the UK.

 

How many successful claims have been filed - do you know??

 

Annie

[majortom10]

I understand your complaint but this response hurts the wrong people. I don't believe your stateroom steward or your dining room waiters had anything to do with the decision on your booking conditions, so why punish them. Your statement at the Passenger Services Desk will not be passed on to Corporate. Instead, your stateroom steward and dining room waiters will suffer.

 

If you don't like the Princess booking conditions, then you don't have to book a cruise on Princess. However, if you decide you want to sail on Princess dispite these terms, don't punish your stateroom steward and your dining room waiters. They will provide excellent service to you and they deserve their pay.

 

Sorry but the only way to get Princess (Carnival) to listen is to hurt them and if that means stopping tips and then the staff will complain to their superiors and perhaps it will feedback to head office and things might change. If you do nothing then things will never change.

[majortom10]

Inland revenue would have a field day if the gratuities were bundled into the fare in the UK.

Optional gratuities are not subject to tax if paid outside the UK.

 

Compulsory gratuities are taxed regardless of who they go to.

 

NCL get around this by stating that the drinks package and the gratuities are a free gift.

 

No they wouldnt unless any crew member was a resident of the UK. As most if not all are not and those that receive the tips they would be taxed in their own country to their regulations and laws.

[majortom10]

The effect is indirect, if enough passengers behave in a certain way causing the staff to react in a way that is not conducive to continue to trade effectively the cruise line will change. In the UK particularly years ago trades unions had a major effect in changing company policy. I am not commenting on whether this is good or bad simply that it happens and change occurs. A while back on P&O, the cruise line had increasingly large numbers of cruisers who decided they would not pay any tips at all. The proportion of passengers became so large that eventually the crew more or less stopped working mid cruise. There were so many stopping work, the cruise line had to rethink their policies and introduced autogratuities to try and redress the balance. It is all about how many people do something collectively and whether this disrupts the business sufficiently.

 

Regards John

 

Not 100% correct the main reason that P&O introduced auto gratuities was the inception of Freedom dining when Ventura first sailed in 2008.

[konyagiqueen]

How many successful claims have been filed - do you know??

 

Annie

We were on a cruise booked from U K which ended in Bangkok. Due to strikes at the airport we were all stranded there for over a week. The USA citizens were pretty well left to find their own way home at their own expense, I believe. The U.K. guests had ABTA and ATOL protection which meant that the company had to find a way to get us home, at their expense, which they did eventually manage to do, in a variety of imaginative ways, while the main airport still remained closed.

[nomad098]

No they wouldnt unless any crew member was a resident of the UK. As most if not all are not and those that receive the tips they would be taxed in their own country to their regulations and laws.

 

They would because VAT is due on compulsory tips/ gratuities at point of sale.

 

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/430329/E24_2015_v1_0.pdf

 

A family member who is an account at the inland revenue explained it to me in technical terms after 2 minutes my eyes glazed over and I was completely lost:confused::confused:

 

Back to the OP's original question all depends on where you book.

 

Each market has it's pros and cons.

 

ABTA and ATOL are a safety net but so is a good quality specialist cruise insurance policy.

 

It all comes down to how risk averse you are.

[capriccio]

I have a general question to UK posters. Do other cruise lines headquartered in the US (Celebrity, Royal Caribbean, HAL, Carnival, etc.) treat price reductions the same way? If so, this sounds like it is not a Princess specific issue. If not, I would vote with my feet and cruise on one of the lines. A severe reduction in British cruisers would make corporate sit up and take notice. Taking frustrations out on the housekeeping and wait staff, not so much.

[majortom10]

They would because VAT is due on compulsory tips/ gratuities at point of sale.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/430329/E24_2015_v1_0.pdf

 

A family member who is an account at the inland revenue explained it to me in technical terms after 2 minutes my eyes glazed over and I was completely lost:confused::confused:

 

Back to the OP's original question all depends on where you book.

 

Each market has it's pros and cons.

 

ABTA and ATOL are a safety net but so is a good quality specialist cruise insurance policy.

 

It all comes down to how risk averse you are.

 

Sorry but you are incorrect why should American cruise lines with international staff have to pay UK VAT. I am well aware of UK laws but those regulations only applies to companies based in UK and staff who are UK taxpayers..

[anniegb]

We were on a cruise booked from U K which ended in Bangkok. Due to strikes at the airport we were all stranded there for over a week. The USA citizens were pretty well left to find their own way home at their own expense, I believe. The U.K. guests had ABTA and ATOL protection which meant that the company had to find a way to get us home, at their expense, which they did eventually manage to do, in a variety of imaginative ways, while the main airport still remained closed.

 

When was this??

 

Not all UK passengers would have bee guaranteed assistance. Only those who had ATOL packages. ABTA is irrelevant in that scenario.

 

Annie

[john watson]

I have a general question to UK posters. Do other cruise lines headquartered in the US (Celebrity, Royal Caribbean, HAL, Carnival, etc.) treat price reductions the same way? If so, this sounds like it is not a Princess specific issue. If not, I would vote with my feet and cruise on one of the lines. A severe reduction in British cruisers would make corporate sit up and take notice. Taking frustrations out on the housekeeping and wait staff, not so much.

 

A deposit paid in the UK is generally considered forfeit if you do not go through with a transaction eventually. Virtually all cruise lines booked in the UK either direct or through a Travel Agent advise the price at the beginning of the deal and it is a final value which does not change. If the cruise line starts selling the same cruise cheaper you have simply lost out and have to put up with it. Your choices are cancel, lose your deposit and re-book as a newcomer or pay sometimes substantially more than the other travellers to complete the deal and try to be happy. You contracted at this original price at which you were happy. Incidentally where a reduced price deposit is offered either by the cruise line or a travel agent, say £20 instead of 10% which lets say is £100. Then if you cancel you will usually find the small print says you have to pay the discounted part of the deposit and stump up the missing £80.

 

Consumer protection through ABTA and ATOL help to redress the inequities of travel and will pay up if say an airline went bust.

 

Regards John

[nomad098]

Sorry but you are incorrect why should American cruise lines with international staff have to pay UK VAT. I am well aware of UK laws but those regulations only applies to companies based in UK and staff who are UK taxpayers..

 

Because you are not paying a US cruiseline you are paying a UK based travel agent.This is the point of sale.

Just because they only sell one US cruiseline they are still a UK based travel agent otherwise they would not be able to offer ABTA or ATOL.

 

Compulsory gratuities incur VAT American cruise lines could claim the VAT back if they can prove that the service was provided outside the EU for each and every UK paying customer.

 

The paper work and time to process everyone would not be cost effective so it is so much simpler to make gratuities discretionary no VAT involved and take the loss if some one removes gratuities.

 

You do realise that you pay VAT on your cruise booking made in the UK with any American owned cruiseline.

 

American owned cruise lines are not exempt from paying VAT when it's due. Why do think that American cruiselines will charge you Spanish IVA (VAT) for on board purchases on EU inclusive cruises starting in Spain.

[soraya]

We were on a cruise booked from U K which ended in Bangkok. Due to strikes at the airport we were all stranded there for over a week. The USA citizens were pretty well left to find their own way home at their own expense, I believe. The U.K. guests had ABTA and ATOL protection which meant that the company had to find a way to get us home, at their expense, which they did eventually manage to do, in a variety of imaginative ways, while the main airport still remained closed.

 

Just wondering if this was a fly cruise? We always book cruise only because we live in Aberdeen. I'm thinking that we would be in the same position as the US cruisers if this happened?

[anniegb]

Because you are not paying a US cruiseline you are paying a UK based travel agent.This is the point of sale.

Just because they only sell one US cruiseline they are still a UK based travel agent otherwise they would not be able to offer ABTA or ATOL.

 

Compulsory gratuities incur VAT American cruise lines could claim the VAT back if they can prove that the service was provided outside the EU for each and every UK paying customer.

 

The paper work and time to process everyone would not be cost effective so it is so much simpler to make gratuities discretionary no VAT involved and take the loss if some one removes gratuities.

 

You do realise that you pay VAT on your cruise booking made in the UK with any American owned cruiseline.

 

American owned cruise lines are not exempt from paying VAT when it's due. Why do think that American cruiselines will charge you Spanish IVA (VAT) for on board purchases on EU inclusive cruises starting in Spain.

 

OK I need an update on a change in VAT regulations.

 

when did the UK start charging VAT on foreign travel holidays??

 

Not all UK Travel Agents are members of ABTA and ATOL protection is only applicable if a package involves a flight.

 

Annie

 

PS I thought most tour Operators operated TOMS and not VAT - probably wrong again.

Edited February 25, 2018 by anniegb

[konyagiqueen]

When was this??

 

Not all UK passengers would have bee guaranteed assistance. Only those who had ATOL packages. ABTA is irrelevant in that scenario.

 

Annie

 

This was in November 2008. I should have made it clear that we were all on a post cruise 2day stay in Bangkok, organised by Princess, so it was not the whole of the ship's passengers. I am pretty certain that all UK stranded passengers were assisted.

[nomad098]

OK I need an update on a change in VAT regulations.

 

when did the UK start charging VAT on foreign travel holidays??

 

Not all UK Travel Agents are members of ABTA and ATOL protection is only applicable if a package involves a flight.

 

Annie

 

Here you go it's called "TOMS"

https://www.gov.uk/government/publications/vat-notice-7095-tour-operators-margin-scheme/vat-notice-7095-tour-operators-margin-scheme

 

If American cruiselines do not have to pay VAT why would they need to be VAT registered

 

© 2018, Carnival plc trading as Princess Cruises.

Carnival plc is a company registered in England and Wales with company number 04039524 whose registered office is at Carnival House, 100 Harbour Parade, Southampton, Hampshire, United Kingdom, SO15 1ST. VAT Number: GB761430058

[anniegb]

Here you go it's called "TOMS"

https://www.gov.uk/government/publications/vat-notice-7095-tour-operators-margin-scheme/vat-notice-7095-tour-operators-margin-scheme

 

If American cruiselines do not have to pay VAT why would they need to be VAT registered

 

© 2018, Carnival plc trading as Princess Cruises.

Carnival plc is a company registered in England and Wales with company number 04039524 whose registered office is at Carnival House, 100 Harbour Parade, Southampton, Hampshire, United Kingdom, SO15 1ST. VAT Number: GB761430058

 

 

Not all companies who are VAT registered charge VAT at the standard rate. AIrline travel is zero rated but they can recover their VAT inputs from the government.

 

The farming industry is another example. Building industry is another example - new houses are VAT zero rated.

 

Under TOMS, the VAT payable is only on the margin not the value of the sale but you know that. Also the calculation is only required on an annual basis.

 

Annie

Edited February 25, 2018 by anniegb

[anniegb]

This was in November 2008. I should have made it clear that we were all on a post cruise 2day stay in Bangkok, organised by Princess, so it was not the whole of the ship's passengers. I am pretty certain that all UK stranded passengers were assisted.

 

So we are aware of 1 incident in 10 years - not a lot.

 

Annie