VAT and residential let

VAT and residential let

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 I have a potential scenario where rooms are to be let to teenagers as bridging accommodation on leaving local authority care.

Local authority pays for accommodation and night cover is provided.

Am i right in thinking that as this is a residential let it will be VAT exempt and that the provision of night cover is a composite supply

and follows the treatment of the residential let?

any thoughts gratefully received.

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chips_at_mattersey
By Les Howard
30th Oct 2012 13:46

Overnight Accommodation

The question is whether the supply is akin to that provided by a hotel, or is effectively a residential let. I have seen these settled both ways on very similar facts. The other argument is whether your supplies are properly supplies of welfare, which are exempt. If the 'customer' is actually the local authority, with an ability to recover VAT, then there is no problem charging VAT, as it can be recovered, and you will be able to claim VAT on your own costs.

Do have a look at the Fairway Lodge case as well http://www.taxbar.com/documents/dinaro_vat.pdf

You may find that it is worth approaching HMRC for a clearance, so you don't proceed with uncertainty.

 

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