Q:
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?
A:
Hi
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