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vat on hotel room hire / conferences

OTT in place - is exemption available

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Hotel client has an OTT. Does this mean that they are excluded from the possibility of applying the vat exemption  to the room hire?

"When an ‘option to tax’ has been made by the person hiring out the room VAT will be chargeable (in the vast majority of cases).  However, historically, the widely accepted position has been that renting an essentially empty room for a defined period is the grant of a license to occupy land, and is therefore VAT exempt. VAT law explicitly removes this exemption when the hire is ‘for the purpose of a supply of catering’."

I can't decide whether this says that they can or can't.

In my client's case, we're talking about historic income. I presume that it would be on my client to prove which income was for (materially) dry hire and which was for something more?


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By Les Howard
12th Aug 2019 11:30

All supplies of room hire from the date of the option to tax are taxable at 20%. Earlier supplies are exempt.
Supplies of room hire for the purposes of catering are taxable whether or not there is an option to tax.

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Replying to leshoward:
By WhichTyler
12th Aug 2019 13:24

~Exactly, the 'option to tax' is opting to tax supplies (rent) that would normally be exempt...

Having opted to tax, you can't opt back out...

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Replying to leshoward:
By atleastisoundknowledgable...
12th Aug 2019 13:37


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