In an important case for hotels that offer a licenced venue for weddings and civil partnerships, a tax tribunal has held that the hire of the room is not exempt from VAT.

The Upper Tribunal has considered the VAT treatment of the separate hire by a hotel of a room for the wedding ceremony itself to people who are holding their wedding ceremonies and receptions at the same hotel.

The taxpayer had argued that, although VAT needed to be charged on the areas used for the drinks and catering forming part of the reception, the hire of the room for the ceremony itself could be exempt for VAT as it was simply the hire of a room and was not connected to the provision of catering or other services.

The Upper Tribunal disagreed and considered the application of a number of European Court judgments on similar issues. They focussed in particular on the fact that the room concerned must meet certain conditions in order to be approved for marriage and civil partnership ceremonies and that the hotel had to ensure that a responsible member of its staff was available during the ceremony. In the light of these factors, they concluded that this was not therefore simply a “passive” letting of the room by the hotel and should therefore be subject to VAT.

It is not yet clear whether the taxpayer will appeal further in this case, but all hotels and other businesses which hire rooms for wedding and civil partnership ceremonies should review their VAT treatment following this decision.

If you would like to discuss the issues raised in this article, please contact a member of our VAT team, our Hotels, Tourism & Leisure team, or your usual Bishop Fleming adviser.

Download a PDF of the case: Blue Chip Hotels [2017].


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