No-shows and cancellations: when does VAT sit on the bill?
Written by Ilias Aarrass5 min read · Last reviewed on 
Written by Ilias Aarrass5 min read · Last reviewed on Every hairdresser, trainer, photographer and coach knows it: a fully booked slot and a client who stays away without notice. More and more freelancers therefore charge a no-show fee or use cancellation terms, and the question follows: does VAT go on that? The answer is more precise than you would think, because tax distinguishes between payment for a service that stood ready and true damages. The main line is fortunately easy to remember.
The main rule: if the service stood ready, VAT applies
VAT is levied on payments for supplies. With a no-show the client paid for the right to your time and availability, and you genuinely delivered that: the chair stood ready, the hour was reserved. A no-show amount or unrefunded appointment is therefore taxed as a rule, at the same rate as the service itself. European case law on unused flight tickets and hotel bookings points the same way: failing to appear does not turn the payment into damages.
When it is untaxed damages after all
What stays untaxed is an amount detached from any supply, purely compensating loss. Think of a client cancelling a large project early and contractually paying compensation for your lost revenue, with no work or availability standing against it. Rule of thumb: the further the payment sits from a concretely reserved service, the sooner it is damages. Grey areas exist, certainly with partly executed projects; if you charge without VAT in such cases, be sure of your ground and record the arrangement in writing.
| Situation | VAT? |
|---|---|
| Client fails to appear, no-show fee per your terms | Yes, at the service rate |
| Late cancellation within 24 hours, part of the price due | Yes, at the service rate |
| Deposit retained after cancellation before the service | Usually yes; VAT already sat on the prepayment |
| Contractual compensation for lost revenue, no supply remains | No, damages |
Deposits and refunds
On a prepayment or deposit you owe the VAT at the moment of receipt, as explained in booking advances and deposits. If the client cancels and you refund, you correct that VAT in your return, preferably with a credit invoice. If you retain the deposit (partly) as cancellation costs, the VAT on the retained part in principle stands. Practically: process no-shows through an ordinary invoice or receipt with VAT, and your records stay right by themselves.
Frequently asked questions
Which VAT rate applies to my no-show amount?
The same rate as the service booked: 9% for the haircut, 21% for the shoot or training. The no-show fee follows the supply it belongs to; see also which VAT rate applies.
I work VAT-exempt in healthcare. Is my no-show fee exempt too?
No, beware: the missed-appointment fee healthcare providers charge is generally seen as payment for the reserved time and falls outside the care exemption. Structural no-show income can thus create VAT duties; check with your bookkeeper, certainly alongside the care exemption.
May I charge 100% for a no-show?
Legally you may in principle charge what was clearly agreed in advance, within reason towards consumers. Many freelancers pick 50 to 100% for no-shows and free cancellation up to 24 or 48 hours ahead; strict enough to steer, reasonable enough to keep the relationship intact.
How do I book a no-show fee I eventually waive?
If already invoiced, issue a credit invoice; that corrects revenue and VAT neatly. If never invoiced, there is nothing to book, though tracking waived no-show revenue somewhere is useful insight.
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
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Ilias
