Updated 22nd November 2023 Following this year’s Autumn Statement, what do the Chancellor’s announcements mean for retail, hospitality and leisure businesses? To find out how the…
If you provide hotel or holiday accommodation, plus other related services, there is potential to save money in relation to VAT. You may be eligible to a refund of VAT if you took deposits for holiday accommodation prior, or during, the change in VAT rates announced in 2020. Many businesses did not capitalise on the full benefits the government gave to ensure the industry had support in a time of financial uncertainty.
There are a number of different VAT rules in respect of hotel and holiday accommodation where supplies may not be at the standard rate. Many businesses have diversified and are not aware of the impact this could have. There is scope to reduce the amount of VAT they are paying and declared previously to HMRC. In addition to the change in VAT rate, there are some other areas that we can review to determine whether or not there is a potential claim. These are exclusive residential use, off season lettings, and the 28 day rule.
Exclusive residential use
Do you have a part of your site that is for residential use only? Are you applying the correct VAT treatment to income in relation to that part of the site? We can assist you with reviewing your contracts, income, and preparing and submitting an error correction notice to HMRC if you believe you have treated this income incorrectly.
Off season lettings
If you provide holiday accommodation in an area that has off season periods, you may be able to exempt income in relation to those lettings. We can you with reviewing your income to determine whether you can claim for overpaid VAT.
28 day rule
Ensure you are accounting for VAT on income that relates to bookings in hotels, and similar establishments, which are longer than 28 days. We can assist you with reviewing your income to see whether you have incorrectly accounted for VAT on income that was not taxable.
All of the above options will depend on whether you meet the relevant conditions for there to be an eligible claim. As part of our review, we will determine whether you meet those conditions before undertaking a review to determine the potential value of any claim. The circumstances for each business is different. Therefore, the determination of a business claiming for overdeclared VAT is a case-by-case basis.
Over the years we have secured many VAT refunds for clients in the hospitality sector who have overpaid VAT. We have an experienced VAT team who help our clients ensure they are paying the right amount of VAT at the right time.
If you would like to discuss the potential of a VAT refund with a member of our team, please get in touch. Our VAT managers are happy to talk through the various options.