VAT rate change: don’t be caught out – here’s our tips for hotel and accommodation providers.
As you may be aware the VAT rate for the hospitality industry is due to change from 9% to 13.5% from 1st September 2023. We have put together some tips on how to manage this change internally and ensure the process is as seamless as possible for you and your team;
- Your Property Management System (PMS) provider should have communicated instructions on how to implement this change. If not, do reach out to your Account Manager for support for this information. The same recommendation applies for hotels using a Revenue Management System (RMS).
- Appoint a team member who is responsible for making the required changes in your PMS/RMS, this generally falls under the remit of your Revenue, Reservations or Finance department.
- Identity any contracted (eg Group/FIT) business on the books where this VAT increase can be applied. Communication with these operators and agents is key so any rate adjustments need to be agreed upon internally before communicating.
- Establish the actual value of any contracted business that is on the books and understand the impact of VAT change on these rates. If rates need to be adjusted on group or contracted business put a system in place to action this. Our recommendation is to do this month by month, or operator by operator.
On the 1st of September:
- Run your normal business on the books, pick-up or pace report.
- Update your PMS with the new VAT percentage – remember to allow sufficient time to do this. Some PMSs require numerous steps to implement.
- Once this is complete, run your pace report again to establish the VAT impact.
- Ensure that your brand website and third-party websites are updated with the new VAT amount.
Further guidance in this VAT rate change and VAT treatment will be available on www.revenue.ie and from the Irish Hotel Federation from the effective date, 1st Sept, 2023.