How we recovered £38,000 of VAT for a Bayswater serviced-accommodation business
Client K operates serviced apartments near Queensway, letting to international visitors and business travellers. The previous accountant treated all the income as VAT-exempt residential letting and hadn't registered for VAT, missing both the output VAT position and, more significantly, the input VAT recovery on a major refurbishment of the apartments.
We reviewed the VAT treatment. Serviced accommodation for short stays (like hotel accommodation) is standard-rated for VAT, not exempt residential letting. This meant the business should have been registered, but it also meant the substantial input VAT on the refurbishment (kitchens, bathrooms, furnishings, professional fees) was recoverable. We registered the business, accounted for output VAT correctly, and reclaimed the refurbishment input VAT.