VAT Ruling May Lead To Refunds For Hoteliers

VAT Ruling May Lead To Refunds For Hoteliers

Hoteliers who have previously accounted for VAT on room deposits that they have retained when a booking has been cancelled or guests have failed to turn up, may be in line for a VAT refund going back four years.

The European Court of Justice has recently released its judgment in relation to so called “no show” deposits effectively overturning HM Revenue & Customs (HMRC) guidance and an earlier high court judgement. 

As a result, HMRC are now accepting deposits retained in the event of a room being cancelled as form of compensation for a lost booking and, therefore, outside the scope of VAT.  Hoteliers who are eligible for a refund need to act fast to maximise the benefit of any potential claim.

If you think that you may be eligible for a claim and would like advice on how to proceed, please contact our hospitality industry specialist Gary Brockway for further details.

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