Hotels can now claim back three years-worth of VAT on their conference rates after HM Revenue & Customs (HMRC) conceded that its guidelines were wrong.

HMRC had been demanding VAT on all three elements of the 24-hour delegate rate - made up of accommodation, food and room hire.

It has now admitted that hotels do not have to charge VAT on 24-hour room hire, which is already the case with room-hire for delegates on a day rate.

The ruling followed a challenge from tax adviser Vantis on behalf of a five-strong hotel and conference group in Bournemouth. The group stopped charging VAT on conference room hire three years ago, saving its customers about £100,000.

Vaughn Chown, VAT director at Vantis, said room hire typically accounted for about 80% of the 24-hour delegate rate.

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