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