Commentary

V6.325 Liability of supplies and activities of public houses

Part V6 Business by business

V6.325 Liability of supplies and activities of public houses

Public houses

V6.325 Liability of supplies and activities of public houses

General principles

Public houses can be owned and operated in a variety of ways, and the way in which they operate may impact on their VAT position and dictate the VAT issues that are particularly pertinent to them. Four types of public house are as follows:

Managed houses

These are public houses owned (usually) by a brewery. The manager, an employee of the brewery, runs the operation. The retail sales of beers, wines, spirits, etc will be supplied by the brewery, who will be required to account for VAT on such sales.

The brewery may franchise the catering side of the operation to the manager. In this instance, the catering services provided become a private enterprise of the manager and, as such, these activities are considered separately for VAT registration purposes. The normal registration and liability rules will apply if the registration limits are exceeded.

A public house does not have to be owned by a brewery to be a managed house. The term can apply equally to circumstances where the owner of the premises is not a brewery but runs the business through a manager. The owner is then the person liable to be registered for VAT and to account for output tax on sales (subject to the comments above regarding catering).

Tenanted houses

These are public houses (tied houses) where the tenant rents the property from the brewery which owns the premises. Under normal arrangements the tenant is required by the terms

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