Covid-19 update 2: Face Coverings and Temporary VAT reduction
The HBAA (Hotel Booking Agents Association) has been very good at keeping us updated with what we can do and any guidelines we need to stick to. Please see below some information on the recommendation for face coverings and the temporary VAT reduction.
Face coverings recommended for live meetings:
Following the recent advice about the need to wear face coverings in conference and exhibition centres, BVEP has issued a statement:
‘It is strongly advised that face coverings are worn within meeting venues and during meetings. It is anticipated that the only exemption at a business meeting will be if one of the group needs to lip-read/see facial expressions."
The guidance is set out here.
Temporary VAT reduction - 5% reduced rate of VAT which applies between 15 July 2020 and 12 January 2021
HBAA have sought advice from Elman Wall Bennett as to how the temporary VAT reduction may be applied to general meetings and events, including DDRs and 24 hour rates.
For all bookings where the timing and contract allow the following is considered as practical guidance:-
Hire of a room* for a meeting – standard rated or exempt if there is no option to tax in place. Minimal refreshments provided would be disregarded so that the full value would be standard rated (or exempt where relevant)
NB: RE Room hire itself. HMRC refer to the possibility that the room hire might be exempt from VAT. This is correct but most hotels and similar have opted to tax hotel buildings and where this is so, the room hire charge is standard rated.
Provision of dinner etc in a function room – wholly reduced rated
Overnight accommodation with breakfast – wholly reduced rated
Overnight accommodation, breakfast, lunch, dinner and meeting/conference rooms – this is an example of a multiple supply. The overnight accommodation and all the catering would be reduced rated. The meeting/conference rooms including related facilities such as AV and any small-scale refreshments provided in conjunction with the meeting/conference (i.e. tea, coffee, etc) would be standard rated (or exempt as the case may be).
Therefore:
DAY DELEGATE RATE
Only the lunch element qualifies for VAT at 5%.
The overall VAT inclusive rate should be adjusted accordingly (subject to the timing and content of the contract)
24 HOUR RATE
The elements that qualify for 5% VAT are
Accommodation
Breakfast
Lunch
Dinner
Again, VAT inclusive rates should be adjusted to reflect this ( subject to the timing and content of the contract)
Regarding ‘Coffee/tea/biscuits/pastries etc.’ These are very likely to be “minimal refreshments” and so the rate applied to the main supply (i.e. room hire etc) applies. If the refreshments were provided as part of say a 24 hour rate, the treatment would depend on when during the 24 hours they were provided – if, as seems likely, they were provided during a break in the working day, then they would not qualify for the reduced rate.
Please note that in all cases, you should refer to https://www.gov.uk/guidance/hotels-holiday-accommodation-and-vat-notice-7093.
Hopefully, soon we will find out if we can start doing larger events for more than 30 delegates and the government guidelines for keeping everyone safe.
Both Nicky and Helen are here to help when you need us, hopefully, we will all be back organising meetings soon. We are social beings and after such a lengthy lockdown, working from home, juggling childcare etc. we are looking forward to being able to meet again!
We look forward to catching up with you soon and if you have any questions just let us know.
Best wishes and stay safe!
Nicky and Helen