VAT - Hotels and holiday accommodation

Source: HM Revenue & Customs | | 19/06/2013

HMRC have issued an updated version of VAT Notice 709/3 entitled 'Hotels and holiday accommodation'. The notice explains how supplies by hotels and similar establishments such as motels, guesthouses and B&B’s should be treated for VAT purposes. In addition the notice also covers the VAT treatment of holiday accommodation such caravans and camping facilities.

There are a number of areas that hotel operators should be aware of such as the special rules that may allow sleeping accommodation to be VAT exempt if a guest stays for over 28 consecutive days. Hoteliers should also be properly aware of the VAT rules relating to deposits, cancellation and other charges which are prevalent in the hotel industry.

The notice includes sections on:

  • Hotels, inns, boarding houses and similar establishments
  • The reduced value rule for long stay guests
  • Accommodation supplied for catering and other supplies
  • Holiday homes
  • Camping and caravans
  • Deposits, cancellation and other charges

The new version of the notice cancels and replaces the previous version published in 2011 and has been revised to reflect HMRC policy regarding accommodation and catering supplied to employees.


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