Dies anyone have any suggestions on how to deal with the cross over points for VAT on hotel deposits and sales. If you have applied 20% VAT on a deposit at point if receipt but at the date the guest arrives how do you handle it when the VAT rate is then only 5%. The deposits are generally held as a liability and only transferred to income at the booked date. This query will again be raised when the rates once again increase to 20%.
Thanks
JC
One other question, if the depoist is fully refundable do you have to report for VAT at the time the deposit is received or when the guest actually arrives?
Hello - as far as I am aware it is the VAT rate applicable at the 'tax-point' date which applies. Here is a link to HMRC which defines 'tax-point'.
https://www.gov.uk/vat-record-keeping/time-of-supply-or-tax-point
I hope this helps
Peter R
Peter
