BB/1C/06 VAT—hotel conference/function facilities—revised interpretation of law on VAT treatment
Business Brief, Issue 1. 18 January 2006
This Business Brief article announces changes in HM Revenue & Customs' interpretation of the law on the VAT treatment of hotel conference/function facilities.
This change will be incorporated in an update to VAT Notice 709/3 “Hotels and Holiday Accommodation” (Part V8), to be issued in due course.
The change being made affects the liability of supplies of rooms by hotels that are to be used for meetings, conferences and similar functions. There is no change to the treatment of supplies of rooms where the primary use will be for the purpose of supplies of catering, such as dinner/dances, wedding receptions, etc. Supplies of rooms for such purposes are always taxable supplies.
Hotels and other establishments often provide rooms for meetings, conferences and similar functions organised by third parties. It is usual for them to make inclusive charges depending on the requirements of individual delegates. It is the general practice for hotels and similar providers to charge organisers on a delegate or attendee basis (referred to as the “delegate rate”), ie the charge will be determined according to the number of delegates requiring—
— Use of conference room only.
— Use of conference room plus meal(s) (“8-hour conference delegate rate”).
— Use of conference room plus meals and overnight sleeping accommodation (“24-hour conference delegate rate”).
The supply of a conference/function room on its own in these circumstances is