VAT ON CANCELLED GOODS / SERVICES

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  • #552
    garypearce12
    Member

    I have received an invoice today for a meal for a large group of employees. The meal was booked, however cancelled early morning with the hotel.

    The bill received includes a VAT charge.

    As this was a cancelled service, should I be paying a VAT charge?

    #872
    Marie Stein
    Keymaster

    Hi Gary

    It depends on what you’re actually being charged for. But probably not.

    VAT Notice 700, The VAT Guide, section 8.13.1 http://tinyurl.com/9ykqw states that cancellation charges made when customers cancel their booking are not liable to VAT as the payment is not consideration for a supply.

    So if the charge is a cancellation charge, then it shouldn’t include VAT.

    Marie

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