VAT recovery for the hotel and holiday sector
VAT recovery and partial exemption
Hotels and providers of holiday accommodation are subject to the normal rules relating to VAT recovery (see V3.401), including the partial exemption rules (see V3.460) if any exempt supplies are made.
The option to tax and VAT recovery
In certain circumstances it may be appropriate to consider opting to tax to facilitate VAT recovery (see V4.110X). In certain circumstances an option to tax is excluded from having effect (see V4.118).
Business entertainment and blocked input tax
Even where input tax can be linked to a taxable activity certain types of expenditure are excluded or 'blocked' from VAT recovery by their nature. This includes expenditure on business entertainment. Input tax excluded from credit is described in V3.440–V3.450 and business entertainment is specifically addressed in V3.446.
Other practical points for the hotel and holiday sector
VAT on the construction of holiday homes
A builder can zero-rate
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Web page updated on 17 Mar 2025 14:24