When the 5% reduced rate was announced in the summer statement on 8th July for the leisure and hospitality sector, one problem was that certain supplies which may have seemed to be at 5% in fact weren’t, due to the existing VAT legislation.
HMRC initially took the view that boats hired out for a period of greater than one day was NOT holiday accommodation, even when it offered sleeping accommodation and the purpose of the hire was to sleep and/or travel on the boat. Therefore, such a hire was deemed not subject to the 5% rate, and the same view was also applied to the hire of motor-homes.
As a result, following “conversations” with representatives of the boating holiday sector, HMRC has published a revised version of the public notice which now states that both boats and motor-homes hired out for sleeping on will now qualify for the 5% rate.
Boats hired out for sailing only (including instruction) will however not qualify for the 5%.
Our team are of course here to help if you wish to discuss this or any of the recent government announcements in more detail. We remain committed to our clients to provide support to get you through the difficult climate we currently find ourselves in, so please do not hesitate to contact your normal Rickard Luckin contact.