Electricity provided in holiday accommodation cannot be separated from the hire charge

The Upper Tribunal has confirmed that an additional charge for electricity that was included in the price of holiday accommodation by Colaingrove Limited could not be split out for VAT purposes. The Tribunal Judge ruled that the whole charge for the accommodation, including the electricity charge, attracted VAT at the standard rate. The First-tier Tribunal had previously ruled that the supply of electricity could have been treated separately for VAT purposes with any charge attracting the reduced VAT rate (5%). The appeal was in respect of charges for electricity by the Appellant at its holiday parks where the holiday makers had to pay the charge as part of its hire charges.

If you act for a client that makes supplies that involve elements that attract two different VAT rates then please contact our free helpline to discuss the options that your client might have.

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