What is VAT and how is VAT calculated at London Serviced Apartments

What is VAT and how is VAT calculated at London Serviced Apartments

VAT stands for Value Added Tax.

Depending on the accommodation you choose to book and the length of your stay, the VAT rate may vary from 0% to 20%. 

All the properties listed on our website display rates that include VAT, unless otherwise stated.

This means that the rate you see before you book is the total price for the apartment - no additional taxes or service charges will be added to your bill.

Stays over 28 nights usually benefit from VAT savings (where applicable).

There are three main types of room rates in regards to VAT when booking UK Serviced apartments.

1: VAT Exempt Rate

This type of serviced apartment rate is fully exempt from VAT as such the total net price quoted will be equal to the total price paid by the customer.

In this scenario the VAT charged is 0% & VAT reclaimable is 0% .

Business customers must note that they cannot reclaim VAT as there is no VAT on this rate.


2: Full VAT Rate

This type of serviced apartment rate is charged at the full rate of VAT for the first 28 nights, then on the 29th night onwards the rate of VAT reduces.

VAT is calculated at 20% for the first 28 nights, on the 29th night the rate of vat is 4%, the 4% per night rate continues for the rest of the stay.

This VAT situation is unique to serviced apartments (does not apply to hotels) and offers the customer a reduced price from the 29th night onwards. The reduced rate only applies to continuous stays, there cannot be any breaks (check out and check back in).

Government guidance on the Reduced Value Rule for long stay guests.

Business customers can reclaim the full VAT on this rate.


3: VAT on service Rate

This type of serviced apartment rate is charged at the full rate of VAT for the service element of the rate.

The actual rate consists of the VAT Exempt element also known as the rent, and VATable element also known as the service charge. This type of vat only applies to few places.

Rent = The rental amount per night, rent is non VATtable in certain circumstances.
Service element = The cleaning service offered, by VAT law - all services are generally taxable.

Business customers must note that they can only reclaim a very small amount of VAT.

For example:

Dolphin House Apartments
If the Studio Apartment rate = £160.00 per night including VAT

The Breakdown would be:
Rent £146.80 - VAT Exempt
Service £11.00 = VATable at 20% vat = £11.00 + £2.20 = £13.20
Total £146.80 + £13.20 = £160.00

The actual VAT paid on this rate of £160.00 is £2.20

    • Related Articles

    • Different check-in and key collection procedures in serviced apartments

      Checking-in times are usually later than standard hotel rooms and vary from 2pm - 4pm in the afternoon. Please check this carefully before your arrival. These are the main types of key collection procedures in place at serviced apartments: ...
    • How are the apartments ranked/rated?

      Check-in-London.com ranks each apartment with 3 to 5 badges based on their style, comfort, amenities, facilities and guest services, and takes into consideration other aspects of a property such as overall presentation, convenience and customer ...
    • What is a serviced apartment?

      An apartment that comes equipped with furniture, self-catering essentials, bed linen, towels, utilities (electricity, water, internet) all provided and regularly cleaned and checked by a professional housekeeping service or apartment management ...
    • Can I organise a party or social gathering in any of the apartments?

      Unfortunately parties or social gatherings are strictly not allowed in any of the serviced apartments featured on our website. 
    • What is the difference between air-conditioning and comfort cooling?

      Some serviced apartments feature wall-mounted or inbuilt air-conditioning units in some or all of the rooms which can be individually controlled by the guest. However there is another type of temperature control system that is called ...