The association collaborated with HM Revenue and Customs (HMRC), Deloitte and Saffrey Champness to create the working practices for its members.
Expotel and BSI also worked closely with the HBAA and helped form a working party to address the new VAT legislation.
Expotel chief executive Ian Burnley said it was essential that the agency's clients retained their ability to reclaim VAT under the legislation, which was introduced on 1 January.
"We also wanted to minimise the changes in process required of our hotel and venue suppliers," said Burnley. "I believe that the methodology that has been agreed delivers on those key points."
The HBAA working practices for hotel booking agents include:
- Arranging for consolidated invoice payments and not recovering VAT on them
- Sending the client a payment statement outlaying the expenditure incurred by the hotel booking agency as a disbursement on its behalf, separately identifying items including VAT and value of supplies
- The client will use the payment request/statement as the basis of its tax reclaim
- Separately identifying charges made to the client and the VAT