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Temporary Accommodation - VAT

Temporary VAT for Temporary Accommodation

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Hi

I have a client who has a contract with the councils.  The councils pay my client the rent for the temporary accomoodation inclusive of 20% VAT.  My client then pays the landlord.

 

Question:

Does my client charge the council 5% VAT as opposed to 20% VAT from 15th July 2020 due to the new guidance on Temporary accommodation? 

 

Replies (6)

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By lesley.barnes
24th Aug 2020 13:59

No because your client is invoicing for his services including the accommodation charge to the council its still 20%. He will pay the 20% over to HMRC as normal because he isn't running a hospitality business. If he only paid 5% VAT for his accommodation he will only claim 5% back from HMRC.

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RLI
By lionofludesch
24th Aug 2020 14:08

What's this new guidance on temporary accommodation ?

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Replying to lionofludesch:
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By lesley.barnes
24th Aug 2020 15:08

Good point - I misread that will teach me. I took it that accommodation was a hotel because of the mention of 5% VAT rate. I've re-read and noticed the word "landlord".

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By Shammy32
24th Aug 2020 15:51

So, is 5% correct according to the new guidance?

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Replying to Shammy32:
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By lesley.barnes
24th Aug 2020 16:23

No that is the point Lion is making - there is no new guidance for accommodation landlord suggests he is renting a property. Irrespective of that your client is charging the council his usual 20% because it part of the service he is providing.

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By KeaneBean
03rd Nov 2021 18:28

Hi Shammy,

Out of interest, when you say your client is providing temporary accomodation - is that residential accomodation? If so, unless your client is providing additional services, should this be an exempt supply?

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