HM Revenue and Customs Brief 02/13
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Issued 22 January 2013
VAT liability of rooms provided in hotels or similar
establishments with catering
This brief confirms HM Revenue & Customs' (HMRC's)
view of the VAT treatment of rooms provided in hotels and similar
establishments for the purpose of supplies of catering. It is issued
following the review and publication of Notice 709/3 Hotels and holiday
Anyone who provides rooms in hotels or similar establishments
for the purpose of supplies of catering.
Information only to ensure that all those affected are aware
of HMRC’s change of interpretation.
Supplies of land are normally exempt from VAT. However, this
exemption does not apply to the provision of accommodation in hotels,
inns, boarding houses and similar establishments, including
accommodation in rooms provided for the purpose of supplies of
catering, such as rooms provided by hotels for wedding receptions.
Normally, hotels (and similar establishments) supply both the
venue and the catering. However, in some instances the catering may be
supplied by third parties. When the previous version of the guidance
was written, HMRC's view was that, where both the room and the catering
were supplied by the hotel or similar establishment, the whole supply
(including the provision of the room) would be standard rated. However,
where the catering was supplied by a different person, the supply of
the room only by the hotel would be exempt (unless the supplier had
opted to tax). HMRC subsequently changed its view on this point, but
did not update its guidance to reflect this.
HMRC's interpretation of the law
HMRC published an updated version of Notice 709/3 Hotels and
holiday accommodation in October 2011. Paragraph 4.1 of the updated
Notice confirms that the provision of accommodation in an hotel, inn,
boarding house or similar establishment for the purpose of catering is
standard rated regardless of whether the catering is provided by the
operator of the hotel, etc, or by another person.
What this change means
Where businesses have treated supplies as exempt from VAT in
the past no assessments will be issued or action taken to correct the
treatment of such supplies. All supplies should, however, be treated
consistently with HMRC's revised interpretation from the date of this
Revenue and Customs Brief.
Notice 709/3 Hotels and holiday accommodation is available
from HMRC's website.
About the Author
© Crown Copyright 2013.
A licence is needed to reproduce this article and has been republished
for educational / informational purposes only. Article reproduced by
permission of HM Revenue & Customs.
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Article Published/Sorted/Amended on Scopulus 2013-01-30 08:51:11 in Tax Articles