VAT news for hotel conferencing

HMRC have issued revised guidance on the VAT treatment of conference facilities provided by hotels. The guidance is relevant to hotels that provide conference facilities on a 24 hour delegate rate.

Now only part of the 24 hour delegate rate should be subject to VAT. The element of the costs which relate to room hire should be exempt from VAT, unless the hotel has elected to tax the premises, known as an ‘option to tax’.

These changes will mean that some hotels may be entitled to a VAT refund and HMRC have also issued guidance on how this claim should be made.

HMRC have also confirmed that hotels that wish to continue charging VAT on the full cost of 24 hour delegate rates may do so. This may well be the simplest option for some hotels but may mean they lose out on some bookings from businesses which are unable to reclaim the input VAT they incur.

This change does not affect the VAT treatment of supplies of rooms where the main purpose is for supplies of catering, such as dinner dances, wedding receptions etc.

If this change affects your business and you would like to know more please get in touch.