How we recovered £34,000 of VAT for an Earls Court serviced-accommodation business
Client K operates serviced apartments and short-stay accommodation in Earls Court, 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 the input VAT recovery on a major refurbishment.
We reviewed the VAT treatment. Serviced accommodation for short stays (like hotel accommodation) is standard-rated for VAT, not exempt residential letting, which meant the business should have registered, but 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.