It's been a little while since I last posted anything on here.
I have a client who runs a hotel and has some self-catering holiday accommodation. I am a bit confused about the temporary reduced VAT rate and was hoping for some guidance.
My client has a company, who every now and then book a room for an employee to stay in for 2-3 nights. Food & Drink are not included in the room price. From what I have read on HMRC and my understanding being - as the accommodation is booked by the company and not the individual staying then it is the Standard 20% VAT that is charged, however, for the holiday lets for a few nights this would be at the Temporary Reduced VAT rate (again food & drink are not included).
With regards to the food & drink - food and non alcoholic drinks should be charged at the reduced rate for both the Hotel & Holiday Accommodation.
Please can you let me know if my thinking around this is correct as their accountant has said it should all be charged at 5% except for Alcoholic Drinks.
Can you point to the regulations that say your client can't apply the reduced rate VAT to a Company booking? I've not got anyone affected on my books but my understanding is it applies to all bookings so I think the accountant is right.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
I don't think the long stay guest rule applies in your situation. Accommodation is for only 2-3 days at a time. The bit about Companies and individuals relates to Companies booking regular repeated short term booking eg Airlines for Cabin crew, then the reduced value rate doesn't apply. The reduced value rate (where no VAT on sleeping accomodation is charged after the 28th day) is not the same as the reduced VAT rate.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
