VAT “ Value Added Tax ” ( VAT ) is highly complex and outside the scope of this book , as currently the threshold for registration for VAT is £ 70,000 . This means that you would only have to register for VAT , and hence charge VAT to customers , once your B & B turnover ( total sales revenue ) is above £ 70,000 .
As a three-bedroom B & B charging £ 65 per night would have to reach just over 98 % occupancy year-round to hit £ 70,000 turnover , it is highly unlikely that most readers of this book will find that VAT is relevant to them . Again , this is something that you should discuss with an accountant .
Needless to say , you will not want to register for VAT until you have to because , although you would gain by being able to claim back VAT spend on business purchases , you would lose much more by having to effectively raise your prices by 17.5 % ( 20 % from 4 th January 2011 ). In practice , this often means that you are forced to reduce your net room rate to mitigate the rise in the tax-inclusive price , and you suffer a loss of sales because of the forced price rise – a nasty “ double whammy ”.
This unfair downside of VAT does at least give small B & Bs an “ unfair ” advantage in competing with local hotels – they have to charge VAT , and you don ’ t . Enjoy it while you can , as there are hardly any other advantages given to small businesses by Government !
Part Two : Running your B & B
Chapter Four – your B & B and what it will offer
Guest bedrooms
Right at the beginning of this book we mentioned people ’ s rising expectations , and the fact that no amount of fancy décor or character will make up for having to leave your room and go down the corridor to have a pee . The fact is that almost everybody now expects to have at least a shower room and WC “ en suite ” wherever they stay .
If because of the layout of your property , you are hoping to get away with one or more rooms having use of a separate bathroom , we would strongly caution against it . If you can think of another way round the problem which will give you an “ en suite ” shower or bath , then do that instead . You would find that a room without “ en suite ” bath or shower will be very difficult to fill , and that you could not charge anything like as much for it .
How to Start & Run a B & B www . howtorunabandb . com