V6.326 VAT recovery and practical points for public houses
VAT recovery for public houses
Public houses are, in the main, fully taxable businesses and, therefore, are able to recover in full the VAT they incur on business purchases, subject to the normal rules (for input tax excluded from credit, see V3.440–V3.450).
However, if public houses make exempt supplies, such as room hire and certain fruit/amusement takings (see V6.325 for discussion of liability), they may need to consider the partial exemption rules which are covered in V3.460–V3.470. As levels of exempt income are typically low, it will particularly be worth considering whether the de minimis rules apply which allow for VAT to be recovered in full where the amount attributable to exempt supplies is seen as negligible. These rules are discussed in V3.465. In respect of room hire, some pubs may wish to consider opting to tax their properties in order to mitigate any issues associated with partial exemption, for which see V4.114–V4.116.
Other practical points for public houses
Retail schemes, accounting and records for pubs
With improvements in technology, retail schemes are perhaps less frequently used than they once were.
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