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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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.
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".
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.
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?
Thanks