MSE News: Hotel chains not showing full price with taxes

Former_MSE_Helen · 30 August 2012 at 8:09AM

"Nearly half major hotel chains in the UK are breaching regulations by not including VAT in headline prices, says Which? ..."

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Hotel chains not showing full price with taxes

redpete · 30 August 2012 at 10:23AM

I've been caught out twice by this, both times with Radisson. Booked via a website provided by our corporate booker, once for central London and second time for a Heathrow hotel. When I complained I was told that this does happen for some London hotels, presumably because a large proportion are booked bfor overseas visitors who can claim back VAT.

HappyBunny · 30 August 2012 at 12:07PM

I don't understand the Vat rules and hotels. If I book via hotels.com or some other 3rd party bookers, they don't seem to charge vat, or don't provide invoices that show vat - they have statements on their websites to the fact (although I haven't compared their prices with the hotels own website). if I book with travel lodge or premier inn they provide invoices that show vat.

I tend to do a search and go for the cheapest, so long as the price doesn't increase when I come to pay.

chattychappy · 30 August 2012 at 1:00PM

Most of the hotels quoted are typically used by business travellers and it's common for B2B pricing to be ex VAT. Provided it's clear that the pricing is exVAT I don't see a problem though of course Which? loves to see a problem on hour behalf. (People really should learn how to estimate +20% in their head.)

Personally I think it's not bad thing if people see the VAT element separately. If they were more aware of the taxes we pay to the HM Government, then perhaps the government couldn't get away with so much!

JasonLVC · 30 August 2012 at 1:52PM

HappyBunny wrote: »

I don't understand the Vat rules and hotels. If I book via hotels.com or some other 3rd party bookers, they don't seem to charge vat, or don't provide invoices that show vat - they have statements on their websites to the fact (although I haven't compared their prices with the hotels own website). if I book with travel lodge or premier inn they provide invoices that show vat.

I tend to do a search and go for the cheapest, so long as the price doesn't increase when I come to pay.

The VAT rules changed in January 2010 meaning that agents organising hotel bookings were at a VAT disadvantage and the work around was to change the way invoices were raised (ie, the invoice comes from the hotel, not the agent as it used to do).

You book direct with Travelodge, not via a third party such as hotel.com and so the VAT treatment is straight forward VATable. I'm sure that is sufficient explanation to satisy your curiosity but if you really want to go to town and slip it into conversation one evening:D, then google TOMS (Tour Operator Margin Scheme).

JasonLVC · 30 August 2012 at 2:05PM

The guidance states :-

(i) Price indications to consumers

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2.2.7 All price indications you give to private consumers, by whatever means, should include VAT.

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(ii) Price indications to business customers

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2.2.8 Prices may be indicated exclusive of VAT at an outlet or through advertisements from which most of your business is with business customers. If you also conduct business at that outlet or through these advertisements with consumers, however, you should make clear that the prices exclude VAT and you should:
(a) display VAT inclusive prices with equal prominence, or;

(b) display prominent statements that the quoted prices exclude VAT and state the appropriate rate. It should be noted that VAT inclusive prices for all goods offered by traders to consumers are required by the Price Marking Order 2004[/FONT][/FONT][FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]6 [/FONT][/FONT][FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman](further information can be obtained from your local Trading Standards Service). [/FONT][/FONT]
[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman][/FONT][/FONT]
[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]So it's fine to charge VAT seperate but it must be clearly shown and arguably if you are selling to consumers then you should default to charging VAT inclusive prices anyway.[/FONT][/FONT]
[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman][/FONT][/FONT]
[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]I guess hotels are doing this so that the come higher up on screen scraper rankings (nothing to do with business users), much like those go compare type websites which show you the cheapest deal but when you click through they've assumed a £1,000 excess and that you do 5 miles a year. By the time you refine the quote to something approaching reality then it suddenly isn't cheap anymore. [/FONT][/FONT]
[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman][/FONT][/FONT]
[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]The airlines have tried this as well with their add on costs at the end of the buying process but which has recently been stopped.[/FONT][/FONT]
[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman][/FONT][/FONT]
[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]
[/FONT][/FONT]

Mobeer · 30 August 2012 at 7:04PM

redpete wrote: »

.. Booked via a website provided by our corporate booker...

In which case I would expect the price to exclude VAT.

redpete · 31 August 2012 at 7:46AM

Mobeer wrote: »

In which case I would expect the price to exclude VAT.

I expect all the headline rates quoted on the site to be on the same basis - i.e. all including VAT or all excluding VAT. On the site we have to use, the prices for hotels in the same chain are quoted differently depending on where the hotel is (London vs anywhere else in the UK), prices from different chains in the same area are quoted differently. You can tell the difference if you drill down to the rate details which includes things like cancellation policy, payment terms, breakfast inc / not inc and sometime whether 'local taxes' are included - in the latter case there is nothing to say how much these local taxes are.

One could argue that it's OK as long as the total price can be calculated if you read the rate info carefully and know what the local taxes refer to; my opinion is that when the headline rate is in large font on the list of hotels available then these should all be given on the same VAT inc/noninc basis.

Rapidassistant · 31 August 2012 at 1:27PM

It definately seems to be a London thing - I've experienced it with Hilton. Going to London for a long weekend next month, and we are staying at the Edinburgh Airport Hilton the night before flying down; no hidden taxes, yet when we went to book the Hilton in London - the tax was whacked on at the end. Double Standards?

I suppose they expect a large amount of business and tourist guests from abroad who can claim the VAT back, so they separate it out. To their credit, Hilton now put it in red letters at the top of the screen that the rate quoted doesn't include tax - rather than hitting you with a nasty surprise at the end.

hcb42 · 2 September 2012 at 6:09PM

it is definitely a London thing and has been for years, so a slightly misleading headline here too!

MSE News: Hotel chains not showing full price with taxes

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