HMRC: Clarifies VAT Rules for Hotels, Holiday Accommodation (Notice 709/3)

We use some essential cookies to make this website work. We’d like to set additional cookies to understand how you use GOV.UK, remember your settings and improve government services. We also use cookies set by other sites to help us deliver content from their services. You have accepted additional cookies. You can change your cookie settings at any time. You have rejected additional cookies. You can change your cookie settings at any time. Find out when you need to pay VAT if you provide holiday accommodation, caravans and camping facilities. Information to help calculate reduced VAT value under the temporary reduced rate has been removed, as the temporary reduced rate which applied to tourism and hospitality ended on 31 March 2022. The temporary reduced rate of 5% that was applied to tourism and hospitality has been corrected to July 2020. The end of the temporary reduced rates has been corrected to 31 March 2022. The temporary reduced rate which applied to tourism and hospitality ended on 31 March 2022. From 1 April 2022 the normal VAT rules apply, and VAT should be charged at the standard rate. The government has extended the reduced rate of VAT for tourism and hospitality. We have added information about government legislating to extend the temporary reduced rate of VAT. This notice has been updated to reflect the VAT reduced rate for tourism and hospitality has been extended from 12 January to 31 March 2021. Section 5 has been updated with information about holiday accommodation qualifying for the temporary reduced rate. The notice has been updated to reflect the changes announced on 8 July 2020 regarding the temporary reduced rate of VAT on certain supplies to hospitality, holiday accommodation, or charge for admission to certain types of attractions. Following the measure on 'unfulfilled supplies' announced in the Budget 2018, section 7 on guidance relating to deposits and prepayments has been amended. This notice explains how supplies by hotels, inns, boarding houses and similar establishments should be treated for VAT purposes — read sections 2 to 4 of this guidance. It also explains how supplies of holiday accommodation, including caravans and camping facilities, should be treated — read sections 5 and 6 of this guidance. Deposits, cancellations and other charges associated with the supply of hotel and holiday accommodation are covered in section 7 of this guidance. This notice has been updated to reflect legislative changes that introduced temporary reduced rates on supplies of the: All references in this notice to “temporarily reduced rated” or “temporary reduced rate” are to supplies made between 15 July 2020 and 31 March 2022. Anyone who makes supplies of accommodation or other services in the hotel and holiday sector. This notice covers the following areas of the VAT Act 1994: This notice now also covers the following areas of the VAT Act 1994: Section 29A of the VAT Act 1994 provides that the goods and services specified in Schedule 7A to the Act are reduced rate supplies. By virtue of The Value Added Tax (Reduced Rate) (Hospitality and Tourism) (Coronavirus ) Order 2020, Schedule 7A, Group 15 specifies any supply which, because it falls within paragraph (d), (e) so far as the supply consists of the grant of a license to occupy holiday accommodation, (f) or (g) of Item 1 (Land) in Schedule 9, is not an exempt supply by virtue of that Item as being entitled to the new rate. From 15 July 2020 until 31 March 2022, a hotel, inn, boarding house, or similar establishment will benefit from a temporary reduced rate when supplying: If you provide furnished sleeping accommodation for long stay guests, read section 3 of this guidance. Read section 4 of this guidance for information about other types of supplies made by hotels, inns, boarding houses and similar establishments, such as conference facilities and wedding packages. This rule allows the charge for the actual sleeping accommodation element of the supply to be re