Commentary

V6.262 VAT recovery and practical points for hotels and providers of holiday accommodation

Part V6 Business by business

V6.262 VAT recovery and practical points for hotels and providers of holiday accommodation

V6.262 VAT recovery and practical points for hotels and providers of holiday accommodation

VAT recovery for the hotel and holiday sector

VAT recovery and partial exemption

VAT is generally only recoverable when it relates to taxable supplies. Therefore to the extent that hotels or providers of holiday accommodation have exempt income they may be restricted in their entitlement to recover VAT. As described in V6.261 although the supply of hotel and holiday accommodation is normally taxable there may nonetheless be exempt activities such as, for example, the provision of exempt conference facilities.

Businesses making a mixture of taxable and exempt supplies will need to consider partial exemption which is described in V3.460–V3.470. Where exempt income is negligible it will be worth noting the de minimis rules addressed in V3.465 which entitle a taxpayer to recover VAT incurred in relation to exempt supplies if it is deemed to be negligible. Input tax more broadly is covered in Division V3.4.

The option to tax and VAT recovery

Given many of the potentially exempt supplies made within the

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