EU law and final rental price

[Tizfata]

Buongiorno everyone!
My (pretty useless) provincial tourist office has always wanted us to display the full rental prices in the apartments. A little difficult (impossible?) in winter months but I showed the full rental price, with cleaning fee included. Only today something on the H-R price page caught my eye...

Please be aware that according to EU law you must provide travellers with the final rental prices. This includes all mandatory sub-costs such as cleaning fees or VAT (when required).

Even if I know that "all the charges are included" is a very good line on one ad, I was wondering how to behave in high season, when I state a minimum of 2 weeks period. If someone is prepared to pay X for 2 weeks it should not be a problem to "discount" the claning fee from X.

Thank you for your thoughts
Have a nice day,
Tiz

PS: Obviously, in Italy we are required to write an invoice at 10% VAT for the rental and one at 21% VAT for the cleaning fee

[Moliere]

Crikey, Tiz, what's the turnover threshold at which you start charging VAT in Italy?

Mols

[Tizfata]

Hi Mols!
If I understood well your question, it is not the amount, it is the kind of service that you provide.
Accomodation has a 10% VAT
Services (like cleaning) has a 21% VAT
Food has a 4% VAT
This is why B&Bs should write 2 invoices (or 1 with 2 different rates): one for the bed, one for the breakfast.

Oh, maybe you mean: "if you are a small business, you do not charge VAT", is it that? I "am" a company and I have to write invoices...

[Hells Bells]

But surely you don't charge VAT if you aren't registered for it?

[Tizfata]

But surely you don't charge VAT if you aren't registered for it?

(AFAIK) Of course not. But would not that make me an "illegal" business?

[Hells Bells]

In the UK you are only required to register for VAT (and therefore charge it) if you have a turnover over a certain amount.

[Moliere]

In the UK you are only required to register for VAT (and therefore charge it) if you have a turnover over a certain amount.

Yes in the UK it is currently £73,000 of turnover - below that level you do not charge VAT (nor can you reclaim VAT the business has paid)

Mols

[CarolineH]

I am VAT (TVA) registered in France : Gites (as opposed to hotels) charge VAT at 5.5% (breakfast is 19.6%) and all the supplies and materials that I buy for the gites is at 19.6%. If I charge it at 5.5 that means that I can claim back, too.

At the end of each year, I always get a rebate. If there has been lots of work done (like a swimming pool build this year) this can be quite significant. It also means that when I buy new windows for MY house (just ordered 1000 euros worth) I put them through the company and they cost me nearly 20% less (the revenue doesn't know where the windows were put )

Sorry to deviate from the original post

[CSE]

Laws regarding how much VAT is to be paid and when it is collected is down to each country.
The U.K. is very different to Spain or Italy as is France is to The Netherlands.
So lets help answer the question. “How to behave in High Season”. If it was me I would advertise as the law states, then if you want to give a discount and it helps with your accounting* then give the cleaning for free. If not a “normal” rental discount would be fine

*I say this as I appreciate that you may still have to write that bill for the non-chargeable item if the taxman says it is necessary. Maybe talk this over with your accountant.
Sorry I am not using the correct technical, Italian, terms for taxman, accountant etc.

[Tizfata]

Sorry I am not using the correct technical, Italian, terms for taxman, accountant etc.

When I am posting, I NEVER use the correct term for anything
Thank you!

[Essar]

Talking about VAT in the UK; we have two holiday apartments which are doing fairly well so we decided to investigate buying a third. In fact we we looked at a 5-star dual apartment set - two flats with connecting doors, each sleeps 4 - they can be let separately or together. The price £250,000 + VAT total £300,000; when I queried the VAT being charged on the purchase price the developer stated that they were registered commercial properties so VAT must apply - "anyway it doesn't matter you claim it back in your VAT return" - when I pointed out we aren't registered he said "you must be to get the VAT back", I again pointed out that our potential turnover on the new flat(s) would be less that £73k so couldn't register and that if we did we would immediately have to pay the VAT man 20% of our rental fees, effectively a 20% reduction in income as we couldn't raise prices by 20%. He just looked at us blank as we accompanied Elvis out of the building, needless to say the 7 sets of flats are still for sale and probably will be in 20 years time! We have spoken to several agents about this and every one of them was amazed that the development had been registered as a commercial property development and not a residential one, much easier - no VAT and as long as the lease says OK for holiday rentals your away.

Steve