VAT and other random questions.

[TGS]

Hello folks,

Today I have a list as long as my arm to prepare before meeting with the bank on Thursday to discuss the purchase of the 7 apartment holiday let.

My initial excitement is still present but has now been joined by a cold sweat.

One of the questions relates to me confirming the VAT position regarding the purchase. I have just spent about an hour trying to figure it out and am still none the wiser. It's certainly a TOGC and that's about as far as I got.

I have emailed my accountant, although I'm not sure whether FHL is his area.

Do any of you have any experience of this?

Other questions:

When do you set your prices for 2016?

The apartments are currently numbered - do you think changing this to 'names' works better? (My 14 year old wants to name them after Monty Python references... I told him I'd consider it and appreciated his input. lol).



Towels or not to towel?
At present they do not accept all male or female groups. Is this standard, allowed?
TV's in bedrooms?

Thanks everyone

[greenbarn]

At present they do not accept all male or female groups. Is this standard, allowed?

Can't help much with the others.
It's acceptable to refuse single sex groups provided you don't discriminate on any unlawful grounds; ie - you can't only refuse all male groups, or only refuse all female groups but you can refuse all single sex groups. You can't further discriminate on age, eg accept single sex groups but not under the age of (insert number!)

Good luck with the bank.

ps yes to towels unless you're aiming at the bottom end of the market. It's really important to identify your target market.......

[TGS]

Thanks- at the moment we're pretty confident that it is the bottom end of the market but have slow and steady plans to move ourselves towards the middle over 3 - 5 years.

[Guest]

[Marks]

My 14 year old wants to name them after Monty Python references... I told him I'd consider it and appreciated his input. lol).

The Nude Organist room has a certain ring to it

[Moliere]

So does the Spanish Inquisition.

[greenbarn]

So does the Spanish Inquisition.

Didn't expect that..........

[Moliere]

Well, at least it would have the comfy chair . . .

[greenbarn]

Well, at least it would have the comfy chair . . .

Stop that, stop that this is getting silly. It started off as a perfectly reasonable question regarding the intricacies of embarking on a new venture in the holiday letting business with some jolly useful advice, then suddenly we're talking about Spanish armchairs and Nude Organists and its all completely silly and time to move on before it gets even sillier.

Yes, that's right, you know who you are - off you go.

Right...... back to those questions.
Anyone?

[TGS]

Thanks 7aspire. My accountant agrees with you

Actually, my accountant is more concerned about us going over VAT thresholds once the purchase has been completed.

I've got to do the projection for the next 3 years over the next few days. Is it common for self catering holiday let businesses to be VAT registered. My previous business wasn't. To be honest VAT gives me the heebie jeebies.

August prices at present are between £495 up to £560 for the apartment that sleeps 4 with a seaview. The market average is about £730 in my location.

Obviously, a jump like that for 2016 would be prohibitive to my existing returning guests, and some apartments require some basic modernisation. We were thinking perhaps a 10% increase for 2016?

Also, winter lets are at present between £630-£650 a month.

I'm meeting my lovely sellers tomorrow to nail down the bookings for the next 12 months.

My son said 'The Spanish Inquisition' too. Daft. You're all daft I like it on here

[greenbarn]

Is it common for self catering holiday let businesses to be VAT registered.

Not through choice as it immediately adds a percentage to what the guest pays, so the property becomes more expensive for them.

IIRC you can opt for a flat rate scheme (is that the right term?) which means you charge the guest 8% rather than 20% but can't claim anything back. (Stands back and awaits correction............. )

Chances are with 7 apartments that you'll be over the threshold.

Oh, and it sounds like you've answered your own question re when to set rates for 2016! You can always crank them up a bit as you get a better idea of the extent of your market.

[Guest]

[TGS]

Thanks Greenbarn.

That's very interesting about the 8%. I'll wait quietly over here to see if you are corrected

[TGS]

Hi 7aspire - the current owner's turnover approx £71,000. They have been concentrating on longer lets and well to be honest, not really pushing the business - they've been doing it 25 years and don't have too. 4 of the flats aren't even available in July. 3 unavailable all year for weekly rentals. Just opening them up will hugely impact on my turnover.

Eeep.

[TGS]

Not that I'm complaining...

It's one of the reasons we want to buy it.

I think I might write to David Cameron and request a more flexible VAT approach, mainly because I don't like VAT paperwork.