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Reduced VAT for HMO

Reducing VAT for HMO where they are not self contained dwellings

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I am confused (and have noticed this confusion elsewhere) as to whether a conversion from a single dwelling to HMO qualifies for a reduced VAT rate.  Whilst the understanding seems to be in the past that the dwellings would need to be self contained, having looked at the 708 notice I am having difficulty with a couple of points.  In 14.5.1, one of the points for an HMO is:

A ‘house in multiple occupation’ is a dwelling that:

  • consists of self-contained living accommodation

Yet 14.5.4 states:

14.5.4 What is included within the meaning of ‘multiple occupancy dwelling’?

A multiple occupancy dwelling is normally a dwelling where an occupant will have some personal space and facilities (such as a bedroom or a bedsit) and will share other facilities with other occupants. Examples of such dwellings are a block of bedsits or a cluster flat.

Multiple occupancy dwellings do not include:

  • single household dwellings with accommodation for au pairs, family guests or ‘live-in’ lodgers
  • hotels, guest houses, and similar establishments providing accommodation for holiday makers, travellers and similar temporary guests

So it seems to be self contained dwelling is just as long as you have your own bedroom potentially whilst a kitchen and bathroom could be shared.

Does anyone know what HMRC may mean by self contained?

Thanks for the help!

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