Non Attendance fee Vat treatment

gallow
gallow Registered Posts: 6 Regular contributor ⭐
in VAT
Hello All

I need some advice regarding Vat.

My company organised conference. It was free for people attending. Some of them didn't show up and we are invoicing them £10 to recover catering costs etc. Was is the Vat treatment of that? We are Vat registered Charity.

What do you think?

Comments

  • payrollpro
    payrollpro Registered Posts: 427 Dedicated contributor 🦉
    Interesting. Firstly, are they contractually liable for the cancellation fee? If it was clearly stated in the booking form then they are liable, though it has to be recognised that your chances of recovery are slim.

    As far as VAT is concerned your question needs to be, is this a taxable supply of service? Generally cancellation fees are not VATable because there is no service supplied, see http://www.hmrc.gov.uk/manuals/vatscmanual/VATSC42400.htm regarding hotel cancellations. You need to check with the helpline for VAT to determine if your employers charges for non attendance are similar enough to the hotel cancellation fees to be treated the same.

    Payrollpro

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