Is venue hire VAT exempt? Room hire, weddings and the option to tax

Usually, yes, but only for the room itself. In the UK, hiring out a room or hall on its own for a meeting or party is usually exempt from VAT unless you have opted to tax the building, but wedding packages, hotel or inn rooms hired for catering, most sports lets and extras you charge for separately are standard-rated at 20%. HMRC calls plain room hire a "licence to occupy land", which the Value Added Tax Act 1994, Schedule 9, Group 1 makes exempt. Once you sell more than the space, you can lose the exemption.

This matters most near the VAT registration threshold. As of 26 October 2026, you must register once your taxable turnover goes over £90,000 in a 12-month period, and exempt room hire does not count towards that figure. So a venue that lets its rooms dry may never need to register. One with the same takings from wedding packages may have to register and charge VAT on all of them.

VAT is a UK-wide tax run by HMRC, so this guide covers England, Wales, Scotland and Northern Ireland. We know of two differences, both noted below: wedding ceremony rooms, and a registration rule for Northern Ireland businesses that buy goods from the EU.

Which kinds of venue hire are exempt and which are taxed?

How HMRC's guidance treats the most common kinds of hire, as of 26 October 2026:

What does "VAT exempt" mean for a venue?

Exempt is not the same as zero-rated, and the difference costs real money.

• Exempt: you charge no VAT on the hire, and the income does not count towards the £90,000 registration threshold. But you cannot normally reclaim the VAT you pay on costs linked to that income (Notice 706, section 4.10). If you refurbish a function room that you only let on exempt terms, you bear the VAT on the builder's invoice.
• Zero-rated: VAT is charged at 0%. The income counts towards the threshold, and you can reclaim VAT on related costs.
• Standard-rated: VAT is charged at 20%. The income counts towards the threshold. If you are registered, you add VAT to your price or pay it out of your price.

If you are VAT-registered because of other sales, you are "partly exempt". You can still reclaim VAT linked to your exempt hire if it is small enough: no more than £625 a month on average, and no more than half of all the VAT you pay on costs (Notice 706, section 11.2). Notice 706 also has two simpler versions of this test (section 11.7).

When is room hire a "licence to occupy land"?

Under Notice 742, para 2.5, the customer must get the right to occupy a defined area, for an agreed period, in return for payment, and be able to occupy it as if they were the owner and keep others out. All of these features must be present.

Para 2.6 gives examples, including "hiring out a hall or other accommodation for meetings or parties". Use of a kitchen, lighting and furniture can be part of the same exempt hire. Office space let as a bay, room or floor is also on the list.

In practice, a hire looks exempt when all of these are true:

• the customer books a named space for set hours;
• they have it to themselves;
• they get only the space and its normal fittings;
• they arrange their own food, drink and music;
• you have not opted to tax the building.

When is room hire not exempt?

You do more than provide the space. Notice 742, para 2.6 excludes wedding and party facilities where the supplier does more than provide the space, for example by helping with entertainment or arranging catering. Para 2.7 says wedding facilities, including rooms for the ceremony, wedding breakfast and evening party, are not a licence to occupy at all.

You are a hotel, inn or similar and the room is for catering. Item 1(d) of Schedule 9, Group 1 removes one thing from the exemption: a room in a hotel, inn, boarding house or similar establishment supplied for catering. HMRC's manual (VATLP11700) says that room is standard-rated whether you provide the food or a third party does. The law does not define "inn". HMRC gives it its ordinary meaning: historically a house, including a public house, that provides lodging for payment (VATLP11200).

Guests stay overnight in holiday accommodation. Item 1(e) taxes holiday accommodation. Notice 709/3, section 5 says this covers a house or flat advertised or held out for holiday use. If your event barn comes with bedrooms let to guests, the overnight part is standard-rated.

You have opted to tax. Once you opt to tax a building, all your hires of it are standard-rated, with limited exceptions such as dwellings.

Is a wedding package VAT exempt?

No. Notice 709/3, section 4.4 says a wedding package is a single standard-rated supply, whether you supply the catering or someone else does.

HMRC's manual (VATLP11800) treats a package of ceremony room, wedding breakfast, flowers, toastmaster, bridal rooms and evening disco as one taxable supply. It names four tribunal decisions where venues argued that the room hire was exempt, and lost:

• Willerby Manor Hotels (VTD 16673): the room hire was part of one standard-rated package of wedding reception facilities.
• Leez Priory (VTD 18185): a similar decision.
• Chewton Glen Hotels (VTD 20686): once a reception, meals or dancing are provided, the package is more than room hire.
• Best Images Ltd (TC 00480): the venue mainly hosted weddings with outside caterers, but it provided other support services. The tribunal found that it was not passively letting land.

The lesson of Best Images for barn and dry-hire owners: bringing in outside caterers does not make your hire exempt if you still run the day, staff the venue or provide other services.

Is the ceremony room exempt if I only hire that?

Not if it is approved for civil ceremonies. In Blue Chip Hotels Ltd v HMRC [2017] UKUT 204 (TCC), a Newquay hotel treated the hire of a room approved under the Marriages and Civil Partnerships (Approved Premises) Regulations 2005 as exempt. HMRC assessed it for £54,610 of VAT. The assessment covered weddings where the couple also held the reception at the hotel, but the room hire was accepted as a separate supply, so the tribunal judged the ceremony room on its own.

The Upper Tribunal dismissed the hotel's appeal in May 2017. It said the hotel had actively exploited the room: getting it approved, and meeting the duties that come with approval, added significant value, so the supply was more than letting land. A room set out with chairs and a desk for the registrar was still standard-rated, because the customer was paying for a room where a legal wedding could take place.

The approval regulations cover England and Wales. Scotland and Northern Ireland have their own marriage law. For the approval process, see our guide on how to get a wedding venue licence.

Do I charge VAT on a conference or meeting room?

Not for the room alone, unless you have opted to tax. HMRC's manual (VATLP11800) and Notice 709/3, section 4.3 set out three cases:

1. Room only. Exempt, unless you have opted to tax. Small extras such as coffee or a flipchart go with the room: a room with tea, coffee and biscuits is one exempt supply.
2. Room plus meals for one price (an "8-hour delegate rate"). The room and the catering are two separate supplies. Split the price into exempt room hire and standard-rated catering.
3. Room, meals and overnight stay for one price (the "24-hour rate"). There are three supplies: exempt room hire, taxable accommodation and taxable catering. Split the price unless you have opted to tax.

Example (illustrative round numbers). A company pays £600 for your boardroom from 9am to 5pm plus lunch for 10. This is case 2, so you split the price. If your room-only price is £400 and the lunch is worth £200, the room is exempt (unless you have opted to tax) and the lunch is standard-rated: £33.33 of VAT if you are registered. Base the split on a method you can explain, such as what you charge for each part on its own.

HMRC notes that most hotel chains are thought to have opted to tax their conference facilities. VAT-registered business customers can usually reclaim the VAT, so it costs them little.

Extras you charge for separately, such as a projector, parking or a licensed bar, are standard-rated (Notice 709/3, section 4.3).

Is a pub function room or restaurant private dining room exempt?

It depends on two things: whether you have letting bedrooms, and whether the room is hired for a meal you serve.

A pub with letting bedrooms is likely to count as an inn. A function room hired for food is standard-rated under Item 1(d), whoever provides the food. A room hired for a meeting with no catering stays exempt, unless you have opted to tax.

A pub or restaurant without bedrooms is outside Item 1(d), so the ordinary rules apply. If the group books the room and brings everything themselves, that looks like exempt room hire. For example, a local club pays £250 for a pub's upstairs room for an evening meeting and brings its own sandwiches. The pub supplies only the room, furniture and lighting, so the hire is exempt unless the pub has opted to tax.

If the group books the room to eat a meal you serve, HMRC's general approach to "single and multiple supplies" matters (VATSC11113). Its starting point is:

• a transaction with several parts is usually one supply;
• a part that only helps the customer enjoy the main thing is "ancillary" and follows it;
• a single price does not settle the question either way.

For a private dinner, the main thing the customer is buying is usually the meal. Food and drink supplied in the course of catering is standard-rated (Notice 709/1, sections 1.3 and 3.1). We found no HMRC guidance on a restaurant room fee as such, so treat it as part of a taxable catering supply unless an adviser tells you otherwise.

Example (illustrative round numbers). A party of 20 books a restaurant's private room for a £50-a-head set menu, plus a £150 room fee. On HMRC's general single-supply approach, the room fee is likely to follow the meal, which makes the whole £1,150 standard-rated catering. If the restaurant is registered, the VAT inside the price is £191.67.

Is hiring a village hall for sport exempt?

It depends on the hall and the booking. Notice 742, section 5 says letting facilities for playing any sport is normally standard-rated. A let stays exempt in three main cases:

• A bare general-purpose hall. A village or church hall that only has floor markings is not a sports facility, so letting it is exempt even when it is hired for sport (para 5.2). If you also supply equipment such as nets and rackets, the hire becomes standard-rated.
• One let of more than 24 hours. It must be a single let to the same person, with exclusive control for the whole period (para 5.3).
• A series of 10 or more sessions. All of these must be true: the sessions are for the same activity at the same place; they are between 1 and 14 days apart; the whole series is paid for together, with written evidence; the hirer is a school, club, association or a body representing affiliated clubs; and the hirer has exclusive use during each session (para 5.4; VATA 1994, Sch 9, Group 1, Note 16).

Sports clubs and other non-profit bodies should also read Notice 701/45, which has further exemptions (Notice 742, para 5.1).

Do I need to register for VAT?

As of 26 October 2026, GOV.UK gives these figures:

GOV.UK says you do not have to register if you only sell VAT-exempt or out-of-scope goods and services. Northern Ireland has one exception. A business there that only makes exempt or out-of-scope sales must still register if it buys more than £90,000 of goods in 12 months from VAT-registered suppliers in the EU.

Taxable turnover is everything you sell that is not exempt or outside the scope of VAT. Exempt room hire is left out, but these count towards the £90,000:

• wedding packages;
• catering and drinks you sell;
• hires of a building you have opted to tax;
• sports lets that are not exempt;
• holiday accommodation;
• separately charged extras.

Worked example (illustrative round numbers). A barn owner takes £70,000 a year from dry hire and £30,000 from a bar at events. Taxable turnover is £30,000, so there is no need to register. This assumes the hire stays plain room hire. If the owner sold £70,000 of wedding packages instead of dry hire, taxable turnover would be £100,000 and registration would be compulsory. At 20%, the VAT inside a VAT-inclusive price is one-sixth of it, so a £12,000 package contains £2,000 of VAT.

If you only let space and are well under the threshold, VAT will probably not affect you, but income tax on the hire income may (corporation tax if a company owns the venue). See our guide on tax on venue hire income and the £1,000 property allowance.

Should I opt to tax my venue?

The rules are in HMRC's Notice 742A, last updated 26 May 2026. Opting to tax makes all your supplies of the building standard-rated, and you can usually reclaim the VAT on related costs (section 1.2).

What it covers

• The whole building, plus the land under it and around it within its curtilage, such as yards and forecourts (section 2.4). An option on land covers buildings on it now and buildings built later (section 2.1).
• Not a building designed or adapted for use as a dwelling (section 3.2).

How to do it

1. Decide to opt, then notify HMRC within 30 days of the decision, normally on form VAT1614A (sections 4.2.1 and 4.2.2). The option takes effect even if HMRC does not acknowledge it.
2. If you made exempt supplies of the property in the 10 years before the option takes effect, you need HMRC's permission first, on form VAT1614H. Automatic permission conditions may apply (sections 5.1 and 5.6).
3. If you are not yet registered, send the option notification with your VAT registration application (section 6.1).

How to get out of it

• Within 6 months of the option taking effect, you can revoke it on form VAT1614C, if certain conditions are met (section 8.1.1).
• After that, you can normally only revoke it once more than 20 years have passed since it first took effect, on form VAT1614J, and conditions apply (sections 8.3.1 and 8.3.4).
• It is also revoked automatically if you have held no interest in the building for 6 years in a row, with some exceptions (sections 8.2.1 and 8.2.2).

If you sell. The option is personal to you. It does not pass to the buyer, who decides whether to opt (section 4.4). VAT groups have different rules (section 6.3.1).

Worked example (illustrative round numbers). You convert a barn for events. The builder charges £150,000 plus £30,000 VAT. If you are registered and have opted to tax, you can usually reclaim the £30,000. In return, VAT applies to every hire: a party hire you used to sell for £2,000 now costs a private customer £2,400. If the customer will not pay more, you charge £2,000 including VAT, pass £333 to HMRC and keep £1,667. Opting tends to suit venues hired mainly by VAT-registered businesses, and suits wedding and party venues much less. Reclaiming VAT on costs from before you registered has its own rules, so get advice first.

Do I charge VAT on deposits and cancellation fees?

They follow the hire. HMRC treats a payment you keep when a customer does not use the booking as payment for the supply you agreed to make:

• since 1 March 2019, VAT is due on retained payments for services that are not used (Revenue and Customs Brief 13 (2018));
• since 1 April 2022, most early termination fees and some cancellation fees are liable to VAT if the service they relate to is, even if they are called compensation (Revenue and Customs Brief 2 (2022)).

So a kept deposit on an exempt dry hire carries no VAT. A kept deposit on a standard-rated wedding package includes VAT if you are registered. How much you can keep is a separate question, set by consumer law: see venue hire deposits, cancellation charges and advertised prices.

How do I show a VAT-correct price on my listing?

Since 6 April 2025, section 230 of the Digital Markets, Competition and Consumers Act 2024 has required an invitation to purchase aimed at consumers to give the total price, including any fees, taxes or other charges the consumer cannot avoid. In practice:

• Not VAT-registered: show your price. Do not add VAT or write "plus VAT".
• Registered, exempt hire: show the price with no VAT. You can add "no VAT payable" if it helps business customers.
• Registered, standard-rated (packages, catering, opted buildings): show the VAT-inclusive price to private customers. Prices offered only to businesses are outside this consumer rule, but say clearly whether VAT is included.
• Mixed day rates: quote one total and keep a record of how it splits between exempt and standard-rated parts.

What we don't know

• The Budget on 28 October 2026. The £90,000 registration threshold, the £88,000 deregistration figure and the 20% standard rate are correct as of 26 October 2026. The Budget could change any of them, and we will re-check this guide after it.
• Minimum spend deals and restaurant room fees. We found no HMRC guidance on a room that is "free" if the group spends a set amount on food and drink, on VAT on a shortfall charge when the group spends less, or on a separate room fee in a restaurant or pub without bedrooms. Take advice before you set up these deals.
• Dry-hire weddings. HMRC says wedding facilities are not a licence to occupy, and tribunals have taxed venues that provided support services. Whether a truly bare wedding hire, with no services at all, could be exempt depends on the facts.
• Ceremony rooms outside England and Wales. Blue Chip relied on approval under the England and Wales regulations. We found no HMRC guidance or case applying it to venues in Scotland or Northern Ireland.
• Older guidance. Notice 742 was last updated on 31 December 2020 and Notice 709/3 on 5 August 2022. Both still mention temporary reduced rates that ended long ago. The law they rely on, Schedule 9 of the VAT Act 1994, showed as up to date on legislation.gov.uk when we checked.
• Northern Ireland. Under the Windsor Framework, Northern Ireland follows EU VAT rules for movements of goods but stays in the UK VAT system (VATNIEU2100). Room hire is not a supply of goods, so the rules in this guide should apply there in the same way, apart from the EU goods registration rule above.
• Your own facts. Single or multiple supply, "similar establishment" and "more than providing the space" are all questions of fact. HMRC calls the "similar establishment" test principally a question of fact and impression (VATLP11330).

This is general information, not legal, tax or financial advice. For a decision about your own venue, speak to an accountant or VAT adviser, or ask HMRC.

Frequently asked questions

Is venue hire VAT exempt in the UK?

Hiring out a room or hall on its own for a meeting or party is usually exempt from VAT as a licence to occupy land (HMRC VAT Notice 742, para 2.6). It is standard-rated at 20% if you have opted to tax the building, if it is a wedding package or if it is a hotel or inn room hired for catering. It is likely to be standard-rated too if you also arrange the catering or entertainment.

Do I charge VAT on a wedding venue?

Yes, at 20%, if you are VAT-registered. HMRC treats a wedding package as one standard-rated supply, even when someone else provides the catering, and its manual names four tribunal decisions that agreed. Hire of a room approved for civil ceremonies was held to be standard-rated in Blue Chip Hotels v HMRC (2017).

Does exempt room hire count towards the VAT threshold?

No. Taxable turnover leaves out exempt income, so exempt room hire does not count towards the £90,000 registration threshold, as of 26 October 2026. Wedding packages, catering, bar sales and hires of an opted building do count.

Is a meeting room with lunch VAT exempt?

The room is exempt unless you have opted to tax, but the lunch is standard-rated catering. HMRC says a room with tea, coffee and biscuits is one exempt supply. A room with a meal or buffet for one price is two supplies, and the price must be split between them.

Can I reverse an option to tax?

Only in limited cases. You can revoke it within 6 months of it taking effect if certain conditions are met. After that, you normally have to wait until more than 20 years have passed. It also lapses automatically, with some exceptions, if you hold no interest in the building for 6 years in a row (HMRC VAT Notice 742A, section 8).

Sources

• VAT on land and property (VAT Notice 742), HMRC — gov.uk/guidance/vat-on-land-and-property-notice-742, accessed 26 October 2026.
• Opting to tax land and buildings (VAT Notice 742A), HMRC — gov.uk/guidance/opting-to-tax-land-and-buildings-notice-742a, accessed 26 October 2026.
• Hotels and holiday accommodation (VAT Notice 709/3), HMRC — gov.uk/guidance/hotels-holiday-accommodation-and-vat-notice-7093, accessed 26 October 2026.
• Catering and takeaway food (VAT Notice 709/1), HMRC — gov.uk/guidance/catering-takeaway-food-and-vat-notice-7091, accessed 26 October 2026.
• Partial exemption (VAT Notice 706), HMRC — gov.uk/guidance/partial-exemption-vat-notice-706, accessed 26 October 2026.
• VATLP11800 Hotels and similar establishments: wedding packages, HMRC VAT Land and Property Manual — gov.uk/hmrc-internal-manuals/vat-land-and-property/vatlp11800, accessed 26 October 2026.
• VATLP11700 Hotels and similar establishments: rooms used for catering, HMRC VAT Land and Property Manual — gov.uk/hmrc-internal-manuals/vat-land-and-property/vatlp11700, accessed 26 October 2026.
• VATLP11200 What is a hotel, inn or boarding house?, HMRC VAT Land and Property Manual — gov.uk/hmrc-internal-manuals/vat-land-and-property/vatlp11200, accessed 26 October 2026.
• VATLP11330 Meaning of similar establishment, HMRC VAT Land and Property Manual — gov.uk/hmrc-internal-manuals/vat-land-and-property/vatlp11330, accessed 26 October 2026.
• VATSC11113 Single and multiple supplies: the general approach, HMRC VAT Supply and Consideration Manual — gov.uk/hmrc-internal-manuals/vat-supply-and-consideration/vatsc11113, accessed 26 October 2026.
• Value Added Tax Act 1994, Schedule 9, legislation.gov.uk — legislation.gov.uk/ukpga/1994/23/schedule/9, accessed 26 October 2026.
• Blue Chip Hotels Ltd v HMRC [2017] UKUT 204 (TCC), Upper Tribunal (Tax and Chancery Chamber) — assets.publishing.service.gov.uk, accessed 26 October 2026.
• VAT registration thresholds, GOV.UK — gov.uk/how-vat-works/vat-thresholds, accessed 26 October 2026.
• Register for VAT, GOV.UK — gov.uk/register-for-vat, accessed 26 October 2026.
• VAT rates, GOV.UK — gov.uk/vat-rates, accessed 26 October 2026.
• Revenue and Customs Brief 13 (2018): change to the VAT treatment of retained payments and deposits, HMRC — gov.uk/government/publications/revenue-and-customs-brief-13-2018, accessed 26 October 2026.
• Revenue and Customs Brief 2 (2022): VAT early termination fees and compensation payments, HMRC — gov.uk/government/publications/revenue-and-customs-brief-2-2022, accessed 26 October 2026.
• Digital Markets, Competition and Consumers Act 2024, section 230, legislation.gov.uk — legislation.gov.uk/ukpga/2024/13/section/230, accessed 26 October 2026.
• VATNIEU2100 The Single Market concept: background, HMRC VAT Northern Ireland and the EU Manual — gov.uk/hmrc-internal-manuals/vat-northern-ireland-and-the-eu/vatnieu2100, accessed 26 October 2026.
• Budget 2026, HM Treasury — gov.uk/government/topical-events/budget-2026, accessed 26 October 2026.

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