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Cancellation insurance One option that is often given to guests on booking is to take out cancellation insurance.
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Disclaimer: Whilst every effort has been made to ensure the accuracy of the information contained in the Pink Book of Legislation, we regret that we cannot be responsible for any errors. To avoid any problems with cancellation or curtailment (when a guest cuts their stay short), you are strongly recommended to have a cancellation policy.
Therefore, you will need to send an invoice to the guest for the amount due inclusive of VAT and include the revenue in your VAT filing.
Please note that VAT only applies to deposits made by the customer.