VAT Refund

jennysek

We booked a stay at hotel in Cornwall, for late July. We paid in full for our holiday at the time of booking a couple of weeks ago. 

I have requested a refund of VAT due to the VAT reduction, but the hotel has refused. In a daily newspaper today there is an article from UK tax company that states that UK companies can use  a  Special change of rate provision that allows them to argue that the point at which tax  is charged is when the service is provided. I suspect it may be down to the goodwill of the company, but I worry that they will pocket the savings and not pass on to their customers. I know lots of hotels are having a bad time, but aren’t we all. Very frustrating as this amounts to over £250 for my holiday. 

Any info on hotels honouring the saving would be welcome.

bazzyb

VAT is at the point of invoice. Whilst their may be special provisions as you have mentioned, their accounting systems may not be geared up for it, and it could potentially incur them additional costs at what is already a difficult time. 

The other point is, as I’m sure you’re aware, lower VAT doesn’t necessarily equate to lower prices for consumers. For their new bookings going forward, they may keep the prices as they are rather than lowering them which means that they would benefit from the change in VAT. 

bradders1983

OP, a question. Had the rate of VAT gone up, would you have contacted the company and offered to pay the extra?

mattyprice4004

You booked a break for X price, the price is still X price. 
No, you are not entitled to the difference; the businesses' VAT affairs are theirs and theirs alone. 

tripled

The VAT rate they have to charge is the one at the "tax point" - see https://www.gov.uk/vat-record-keeping/time-of-supply-or-tax-point. They will have to hand over the full 20% to HMRC.

The only possible way to get around this is if they will allow you to cancel without penalty. You could then re-book from Wednesday at the lower VAT rate (however if they up their prices you wouldn't necessarily be any better off).