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.
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. |
We are paid 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 pays us better, 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.
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
Every figure above was read from the source it is attributed to on 20 September 2026. How we check this.
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