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bigduckontax
bigduckontax, Accountant
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If with supplying the same services but added the availability

Customer Question

If with supplying the same services but added the availability of a breakfast in the charges would we then come under, Private Retreat guesthouse, bed and breakfast establishment.
John.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.

Hello, I'm Keith and happy to help you with your question.

I am of the opinion that this would make your establishment a Bed and Breakfast. The general trend of Private Retreat Guesthouses offer a more comprehensive service with company and enhanced meal provision like, for example lunch, afternoon tea and dinner.

I do hope I have assisted you with your query.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.

Thank you for your excellent support.

Customer: replied 2 years ago.

Keith. If I include a breakfast in our services,would we then not have to charge and be exempt from VAT.

John.

Expert:  bigduckontax replied 2 years ago.

If your turnover in any year approaches or exceeds 81K John then you would have to register the business for VAT as bed and breakfast is a standard rated supply. Here is the key wording from VAT Notice 709/3 which is in the negative, but covers this matter:

'If you supply a room that is not for the purpose of a supply of catering such as for a conference, your supply is exempt, provided you have not opted to tax. See Notice 742A Opting to tax land and buildings.'

The full notice can be found here:

https://www.gov.uk/government/publications/vat-notice-7093-hotels-and-holiday-accommodation/vat-notice-7093-hotels-and-holiday-accommodation

Without catering the supply becomes exempt. Just a point to remember input tax under VAT can only be reclaimed on the proportion of standard, reduced or zero rated supplies, exempt supplies are excluded.

If you business is below the Turnover Threshold then you need not register at all and can ignore VAT.

Customer: replied 2 years ago.

Thanks excellent service good site,highly recommended worth another £10 at least. John

Expert:  bigduckontax replied 2 years ago.

Delighted to have been of assistance.

You have already been most generous.

Customer: replied 2 years ago.

you say without catering VAT exempt

As I say I do not supply anything only

lease by legal signed documents to one person, who supplies all services including accommodation to his

chosen guests. John

Expert:  bigduckontax replied 2 years ago.
You are making exempt supplies John. Exempt supplies are not included in the turnover for calculating the Turnover Threshold. Only standard, reduced or zero rated supplies are aggregated in that calculation.