{"id":4233,"date":"2022-05-18T04:42:59","date_gmt":"2022-05-18T04:42:59","guid":{"rendered":"https:\/\/way2vat.com\/?p=4233"},"modified":"2022-10-30T19:55:42","modified_gmt":"2022-10-30T19:55:42","slug":"hotel-and-serviced-accommodation-why-are-there-so-may-vatgst-rates","status":"publish","type":"post","link":"https:\/\/way2vat.com\/hotel-and-serviced-accommodation-why-are-there-so-may-vatgst-rates\/","title":{"rendered":"Hotel and Serviced Accommodation \u2013 Why are there so may VAT\\GST rates?"},"content":{"rendered":"

Supplies of hotel and serviced apartments can give rise to a variety of different VAT\\GST liabilities.\u00a0 This can be confusing to business customers who want to know if they can recover the VAT\\GST or not. In this post we attempt to unravel some of the confusion.\u00a0<\/span><\/p>\n

Hotel Accommodation\u00a0<\/b><\/h3>\n

In the UK the provision of hotel, holiday accommodation and serviced apartments for short term use is subject to VAT\\GST at the standard rate.\u00a0 Where employees need to travel for business purposes and stay in a hotel or serviced accommodation in the UK for a few nights, VAT\\GST at the standard rate is chargeable.\u00a0 Such VAT\\GST would be recoverable by a business customer, subject to the normal rules. It is of course important that the business retains a VAT\\GST invoice to support VAT\\GST recovery.\u00a0<\/span><\/p>\n

<\/h3>\n

Purchase from a Travel Agent\u00a0<\/b><\/h3>\n

Often a business may buy in hotel accommodation from a travel agent.\u00a0 As we have mentioned in a previous posting, some travel agents often operate under a special VAT\\GST scheme for travel agents called TOMS or \u2018tour operators margin scheme\u2019 which means that they don\u2019t disclose the VAT\\GST on their invoices, so it may seem that no VAT\\GST has been charged \u2013 in fact VAT\\GST is included but not separately shown so it cannot be recovered.\u00a0 Fortunately, most business travel agents are aware of this and arrange things in such a way so that the hotel invoices the business directly with VAT\\GST shown.\u00a0\u00a0<\/span><\/p>\n

<\/h3>\n

Long Stay Guests<\/b><\/h3>\n

As detailed above VAT\\GST is charged on supplies of hotel accommodation.\u00a0 However, if an individual stays in a hotel or serviced apartment for over 28 consecutive days there are special rules which reduce the value of the supply of the accommodation for VAT\\GST purposes to 20% of the \u2018real\u2019 cost.\u00a0 Output VAT\\GST still applies but it is calculated on 20% of the value of the hotel stay, giving an effective VAT\\GST rate of 4%. This reduced value only applies to the accommodation element from Day 29 onwards \u2013 up until day 28 the standard rate of VAT\\GST applies.\u00a0 Therefore, if meals or other services are provided the relief doesn\u2019t apply and the standard rate of VAT\\GST applies.\u00a0<\/span><\/p>\n

It is important to note the rule does not apply to bookings by companies where the accommodation is used by a succession of short-term occupants, and each stay is less than 29 days at a time. A guest\u2019s stay must be continuous to qualify for the reduced value rule. For example, if a guest stays for 3 weeks every month over the course of a year, VAT\\GST at the standard rate is chargeable because day 29 has never been reached.\u00a0<\/span><\/p>\n

The reduced valuation rules can create issues for Accounts Payable systems which may not have the flexibility to deal with a reduced valuation and some systems will use a 4% VAT\\GST rate as a \u201cquick fix\u201d, even though there is no such rate.\u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n

The reduced value rules became more complex during Corona when HMRC introduced reduced VAT\\GST rates for accommodation of 5% and then 12.5%.<\/span><\/p>\n

<\/h3>\n

Lengthy Stays\u00a0\u00a0<\/b><\/h3>\n

Finally, sometimes a business will rent a flat for an employee for an extended period, say for 12 months.\u00a0 If the owner enters into a proper tenancy agreement, such as an assured shorthold tenancy, any rent payable would be exempt from VAT\\GST.\u00a0 In such a case, where additional services are offered e.g. meals, cleaning etc. VAT\\GST at the standard rate would need to be charged on the additional services.<\/span><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Supplies of hotel and serviced apartments can give rise to a variety of different VAT\\GST liabilities.\u00a0 This can be confusing to business customers who want to know if they can recover the VAT\\GST or not. In this post we attempt to unravel some of the confusion.\u00a0 Hotel Accommodation\u00a0 In the UK the provision of hotel, […]<\/p>\n","protected":false},"author":1,"featured_media":4234,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[26,1],"tags":[],"class_list":["post-4233","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-vatgst"],"acf":[],"yoast_head":"\nHotel and Serviced Accommodation \u2013 Why are there so may VAT\\GST rates? - w2v<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/way2vat.com\/hotel-and-serviced-accommodation-why-are-there-so-may-vatgst-rates\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hotel and Serviced Accommodation \u2013 Why are there so may VAT\\GST rates? - w2v\" \/>\n<meta property=\"og:description\" content=\"Supplies of hotel and serviced apartments can give rise to a variety of different VATGST liabilities.\u00a0 This can be confusing to business customers who want to know if they can recover the VATGST or not. 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