tmcmatchWhat corporate travel management costs
Three fee structures, one flow of money that never reaches your invoice, and two published cost lines that sit outside the fee schedule entirely. This page gives you the shape of each and the question each one produces. It deliberately gives you no benchmark figures, and the reason is in the last section.
Key points
- A transaction fee rises with your booking count. A management fee does not. They cross at some volume, and which side you sit on is a forecast.
- A hybrid is both, at lower intensity — and therefore two places for cost to grow.
- Supplier income retained by the agency is part of the economics and is not on your invoice. Ask for disclosure as a contract term.
- Air Passenger Duty is published, per passenger, and moved directly by a cabin policy: £142 a leg on Band B.
- A supply under the Tour Operators Margin Scheme gives you no recoverable input VAT. Two quotes at the same headline price are then not the same price.
What each line on a travel management quote actually charges for
Fifteen lines, in roughly the order they appear on a quote. None of them has a price on this page — no primary source for current UK fee levels exists to cite — but every one of them has a variable that decides the price, and that variable is the thing to ask about.
| What the quote calls it | What it actually charges for | What decides the amount |
|---|---|---|
| Transaction fee / booking fee | A charge per booking event. The first question is what counts as one booking — a trip, a ticket, or each segment and hotel night. | Your booking count, and the supplier’s definition of a booking. Ask for the definition in writing before comparing the number. |
| Online booking fee | The transaction fee for a booking the traveller makes themselves in the booking tool. | Your online adoption rate. The same programme costs very different amounts at different adoption rates. |
| Offline / consultant booking fee | The transaction fee when a consultant makes the booking by phone or email. | How much of your travel is too complex to self-book, which is a property of your routes rather than of the supplier. |
| Change / amendment fee | A charge each time an existing booking is altered. | Your change rate. A programme with frequent itinerary changes can pay more in change fees than in booking fees. |
| Cancellation / refund fee | A charge for processing a cancellation or a refund, separate from anything the airline or hotel keeps. | How often trips are cancelled, and whether the fee applies to unused tickets that are never refunded. |
| Management fee | A periodic fee for a defined service level, independent of booking volume. | What service level it buys, in named people and hours, and what happens to it if volume moves. |
| Service fee | Ambiguous. Used by different suppliers for a transaction fee, a management fee, or a per-traveller charge. | Nothing, until defined. Ask which of the three it is. |
| Implementation / onboarding fee | A one-off charge for configuration, data migration and traveller onboarding. | The initial contract term it assumes. A one-off fee absorbed into year one of a long term is a lock-in by another name. |
| Booking tool licence | A software charge, per seat, per booking or bundled. | Licence basis against expected adoption. Per-seat pricing at low adoption is the most expensive combination. |
| Out-of-hours / emergency call fee | A charge per contact with the out-of-hours service, where it is not included. | Whether out-of-hours is in-house or subcontracted, and whether the fee is per call or per booking actioned. |
| Reporting / management information fee | A charge for reports beyond the standard pack. | What the standard pack contains. Ask for a sample before accepting the line. |
| Rebate / override / supplier commission | Income the agency earns from airlines, hotels and rail on your bookings. It is not on your invoice at all. | Whether it is retained or passed back, and whether disclosure is a contract term. This line decides how low a headline transaction fee can be. |
| “APD” or “air tax” shown as a separate charge | Air Passenger Duty is registered and paid by the aircraft operator and recovered through the fare. | If a quote shows it as a separate supplier charge, ask what it is. The duty itself is not a fee the travel management company sets. |
| “ATOL fee” per passenger | The ATOL Protection Contribution of £2.50 is paid by the ATOL holder to the Air Travel Trust and should not appear as a passenger charge. | Nothing statutory. If it is on a quote, it is a commercial charge and negotiable like any other. |
| VAT on the agency’s supplies | Either normal VAT, or a supply under the Tour Operators Margin Scheme, which gives a business customer no recoverable input VAT. | Which regime applies. paragraph 4.19 of VAT Notice 709/5 requires a TOMS supply sold to a business to carry a reference on the invoice — look for it on a sample. |
Three lines in that table are not fees the supplier sets at all. Air Passenger Duty belongs to the aircraft operator, the ATOL Protection Contribution belongs to the ATOL holder, and the VAT regime is decided by how the supply is structured. Seeing any of them as a supplier line is a reason to ask a question, not a reason to compare it against another supplier’s version of the same line.
A fourth cost sits outside the quote entirely: the meal allowances you pay your own travellers, which are capped for tax purposes by statute at £5, £10 and £25 depending on the length of the day. The rates and the rules behind them. Car travel has its own statutory rate, 55p a mile from 2026–27, and overseas trips their own subsistence table.
The three fee models
The same diagram as a table
| Model | Shape against volume | Cheapest when | The risk it carries |
|---|---|---|---|
| Transaction fee | Rises in a straight line from near zero | Volume is low, or is expected to fall | Every touch is billable, so changes and refunds multiply the count |
| Management fee | Flat, regardless of volume | Volume is high, or is expected to rise | You keep paying it when travel stops, as many programmes discovered |
| Hybrid | A smaller flat element plus a shallower slope | Volume is uncertain and you want to cap both ends | Two moving parts, so two places for the cost to grow unnoticed |
This diagram carries no prices and no axis values. It shows the shape of each model, which is structural and the same for everyone. Where the lines actually cross for your organisation depends on your volume and on the rates a supplier quotes you, and this site does not publish fee benchmarks it has not measured.
| Model | How it works | What to watch | Ask this |
|---|---|---|---|
| Transaction fee | A fixed charge per booking, usually different for an online self-booking, an offline consultant booking, a change and a refund. Suits: Predictable, simple itineraries with a high share of online adoption. | Every touch is billable. A trip that is booked, changed twice and refunded can carry four fees. Ask for the change and refund fees in the same table as the booking fee, not in a schedule at the back. | What is the fee for an online booking, an offline booking, a change and a refund — and which of those does a traveller trigger without knowing? |
| Management fee | A periodic fee for a named service level — agreed headcount, agreed hours, agreed reporting — irrespective of booking volume. Suits: Volatile volumes, or programmes where the value is in the account management and reporting rather than the transaction. | It decouples cost from volume in both directions. Ask what happens to the fee if your volume halves, and what happens if it doubles. | What service level is this fee actually buying, in named hours and named people, and what is the mechanism if volume moves by more than a stated percentage? |
| Hybrid | A smaller management fee for the account team plus a reduced per-transaction charge. Suits: Mid-size programmes that want an account team but will not carry a full management fee. | Two moving parts means two places for the cost to grow. Model it at your actual volume, not at the volume in the proposal. | At what annual booking volume does this become more expensive than each of the two pure models? |
| Supplier remuneration retained by the agency | Commission, override and incentive income the agency earns from airlines, hotels and rail operators on your bookings. Suits: Nothing, from the buyer's point of view — it is not a model you choose, it is a flow you either see or do not see. | This is the part of the economics that does not appear on your invoice. It is also the part that can make a headline transaction fee look impossibly low. | Which supplier income streams arising from our programme do you retain, which do you pass through, and will you disclose them annually? |
The fourth row is the one that is not a model at all. Commission, override and incentive income earned by the agency on your bookings is real money arising from your programme, and it is invisible on your invoice by construction. It is also the reason a headline transaction fee can be quoted at a level that looks impossible: something else is paying for the account team.
The single most useful thing to put in a tenderAsk suppliers to state which supplier income streams arising from your programme they retain, which they pass through, and whether they will disclose them annually — and make the answer a contractual disclosure obligation rather than a statement in a proposal.
What changes as a programme gets bigger
Not the fee level, which this site does not publish. What changes is which question decides the answer.
| Annual travel spend | What changes at this size | What the decision turns on | What to watch for |
|---|---|---|---|
| Under £100,000 | Below the level at which most suppliers will build anything bespoke. You are buying a booking channel and a consultant you can reach, and the fee model will usually be per transaction because there is no volume for anything else to sit on. | Is the out-of-hours cover in-house or bought in, and what does a change cost? At this size, change and refund fees are a larger share of the total than the booking fee. | Minimum-volume or minimum-fee clauses. A floor turns a transaction model into a management fee without being called one. |
| £100,000 – £500,000 | The point at which policy enforcement and reporting start to matter more than booking mechanics, and at which suppliers begin competing on implementation rather than on fee alone. | Does the data reconcile into your finance system natively, or via an export somebody has to handle every month? Twelve manual reconciliations a year is a cost that never appears on any quote. | Implementation and onboarding charges quoted separately from the ongoing fee, and the length of the initial term needed to justify them. |
| £500,000 – £2m | Both fee models are genuinely available and the choice between them becomes a forecast about your own volume. Supplier income retained by the agency starts to be a material number rather than a rounding error. | Which model, and what happens to it if volume moves. Ask for the fee at half your volume and at double it, in the response, not in a conversation later. | A headline transaction fee low enough to be uneconomic on its own. Something else is paying for the account, and it is worth knowing what. |
| Over £2m | Service levels, dedicated teams and reporting become contractual rather than descriptive, and the exit terms start to matter as much as the entry terms. | What you get back on the last day of the contract, in what format, and how fast. Three years of booking history is what makes the next tender competitive. | An incumbent advantage built out of your own data. If the history is not portable, the renewal is not really a competition. |
The only payment we accept is the same fixed fee per enquiry, whether your programme is fifty thousand pounds or five million, and whether or not anything is signed. There is no version of this page that would earn us more, which is why it recommends nobody and prints no benchmark we cannot source.
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Line one that is not in the fee: Air Passenger Duty
APD is charged per passenger per flight, set by destination band and by class of travel. It is published, it is checkable, and it is the one cost in business travel a policy decision moves directly — because the split between the reduced and standard rates is a cabin choice, not a negotiation.
The same diagram as a table
| Band | Destination | Reduced rate | Standard rate | Higher rate |
|---|---|---|---|---|
| Domestic | flights within the United Kingdom | £8 | £16 | £142 |
| Band A | 0–2,000 miles from London | £15 | £32 | £142 |
| Band B | 2,001–5,500 miles from London | £102 | £244 | £1,097 |
| Band C | over 5,500 miles from London | £106 | £253 | £1,141 |
Source: GOV.UK — Rates and allowances for Air Passenger Duty, read 20 September 2026. Direct long-haul flights departing Northern Ireland are charged at £0.
Three things fall out of that table that regularly surprise people:
- Domestic duty is charged on each leg. A UK return carries it twice, which is why the domestic band behaves unlike a short-haul European trip of similar distance.
- The Band B jump is the big one. £142 a passenger a leg between reduced and standard. On a long-haul programme, a cabin policy line is worth more than most fee negotiations.
- Rates rise again from 1 April 2027. A three-year programme modelled on today's rates is already understated. The from 1 April 2027 figures are published and are in the table below.
| Band | Destination | Reduced rate | Standard rate | Higher rate |
|---|---|---|---|---|
| Domestic | flights within the United Kingdom | £8.26 | £16.52 | £146.63 |
| Band A | 0–2,000 miles from London | £15.49 | £33.04 | £146.63 |
| Band B | 2,001–5,500 miles from London | £105.33 | £251.95 | £1,132.76 |
| Band C | over 5,500 miles from London | £109.46 | £261.25 | £1,178.20 |
Source: GOV.UK — Rates and allowances for Air Passenger Duty (2026). Direct long-haul flights departing Northern Ireland are charged at £0.
Every earlier year back to 2015, the band each country falls in and a per-departure calculator are on Air Passenger Duty rates. Which travel costs carry VAT at all, and which can be reclaimed, is on VAT on business travel.
Line two that is not in the fee: VAT under TOMS
The Tour Operators Margin Scheme changes what a price means to a VAT-registered buyer, and it is the least-discussed cost variable in the whole of business travel procurement.
You cannot exclude supplies which are consumed by a business or its employees, they fall within the scope of TOMS and must be accounted for using the scheme.Read it on legislation.gov.uk
Business consumption is inside the scheme, not outside it. And because output tax under TOMS is only determined after a year-end calculation, a VAT invoice in the ordinary sense cannot be issued for a TOMS supply — which is why HMRC requires a marker instead:
When a TOMS supply is sold to a business for use in its business (for example, travel supplies used by its employees) the invoice has to include a reference to indicate that the TOMS has been applied.Read it on legislation.gov.uk
That marker is the thing to look for. paragraph 3.2 permits an operator to opt to treat wholesale supplies outside TOMS so that normal VAT rules apply, which means two suppliers can quote the same headline number and deliver materially different net costs to a VAT-registered buyer.
What to ask forA sample invoice, during the tender, for an itinerary like yours — and a written statement of whether supplies to you will be accounted for under TOMS. Then have whoever handles your VAT return read it before you compare prices.
A note on scale, and on what we are not telling you
UK residents made 94.6 million visits abroad in 2024 and spent £78.7 billion doing it (ONS — Travel trends: 2024 (2024)). Those totals cover all purposes. The ONS publishes visits abroad by purpose of visit in the underlying dataset rather than in the headline article. The business-purpose split was not read for this page, so it is not stated here.
The same discipline applies to fees. There is no shortage of figures in circulation for what UK organisations pay for travel management, and not one of them that was checkable came with a sample size and a collection period. So this page publishes the structures, the two statutory cost lines that are published, and the questions — and leaves the benchmark blank rather than filling it with something you would then negotiate against. The full list of what this site will not print.
Common questions
How much does a travel management company cost?
It depends on which of three structures you buy and on your booking volume, and this site does not publish fee benchmarks. There is a fee per transaction, a periodic management fee, or a hybrid, and separately there is supplier income the agency earns on your bookings which may or may not be passed back to you. The page above sets out how each behaves and what to ask about each. We publish no fee figures because no primary source for current UK fee levels was read when this was written, and a benchmark a reader negotiates against ought to be one somebody measured.
Is a transaction fee or a management fee cheaper?
Neither, in the abstract. A transaction fee rises in a straight line with your booking count; a management fee is flat. There is a volume at which they cross, and a supplier proposing one model is proposing a view about which side of that point your volume will sit on for the life of the contract. The useful question is not which is cheaper today but what each does if your volume halves or doubles.
What is not in the fee?
Usually: implementation and onboarding, out-of-hours calls where those are charged separately, booking-tool licence costs, change and refund fees, and any charge for reporting beyond a standard pack. Separately, supplier commission and override income earned on your programme is part of the economics and does not appear on your invoice at all.
Can we reclaim the VAT on business travel bought through a TMC?
Not on supplies accounted for under the Tour Operators Margin Scheme. HMRC's notice says business consumption is inside the scheme, not outside it: “You cannot exclude supplies which are consumed by a business or its employees, they fall within the scope of TOMS and must be accounted for using the scheme.” (paragraph 3.3). paragraph 4.19 requires an invoice for a TOMS supply sold to a business to carry a reference showing TOMS has been applied, so a sample invoice tells you which regime you are in. paragraph 3.2 lets an operator opt to treat wholesale supplies outside TOMS, so normal VAT rules apply — which is why two suppliers can quote the same headline price and not mean the same thing.
How much is Air Passenger Duty?
It is per passenger per flight and depends on the destination band and the class of travel. from 1 April 2026, the reduced rate is £8 domestic, £15 on Band A, £102 on Band B and £106 on Band C, and the standard rate is £16, £32, £244 and £253 respectively. Rates change again from 1 April 2027.
Does a cabin upgrade change the tax?
Yes, and by more than most travel policies assume. The standard rate applies above the lowest class of travel available on the aircraft. The difference on Band A is £17 a passenger a leg; on Band B it is £142. On a long-haul programme of any size that is a real number, and it is the one cost in business travel that a policy line changes directly.
Should we ask for a fee reduction or a rebate share?
They are different things and worth asking about separately. A fee reduction lowers what is on your invoice. A share of retained supplier income changes a flow you cannot currently see. A supplier can give ground on the first while the second stays exactly where it was, so ask for disclosure of supplier remuneration as a contractual obligation rather than negotiating a number in the dark.
What should we budget for implementation?
This site does not publish a figure, for the same reason it publishes no fee benchmarks. What is worth doing is making the supplier quote it as a line, separately from the ongoing fee, and asking what initial term it is predicated on. An implementation charge absorbed into year one of a three-year term is a lock-in with a different name.
Sources cited on this page
- GOV.UK — Rates and allowances for Air Passenger Duty
- VAT Notice 709/5 — Tour Operators Margin Scheme
- CAA — ATOL Protection Contribution
- Package Travel and Linked Travel Arrangements Regulations 2018, reg 3
- ONS — Travel trends: 2024
- GOV.UK — Air Passenger Duty for plane operators
- Income Tax (Approved Expenses) Regulations 2015 (SI 2015/1948)
Every figure above was read from the source it is attributed to; the date the sources were last read is at the top of this page. How we check this.
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