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Serv accom & tour operators margin scheme

Can a serviced accommodation business apply the tour operators margin scheme

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We have received an enquiry from a company that rents accomodation (apartments) from various landlords on a block booking basis 12 months / 24 months and takes on the council tax, repairs, utilities, gardening etc, they then hire this out on short term lets on Air B&B, Booking.Com etc. They wanted to apply the TOMS vat scheme, I think that they fall foul of the substantially altered rule in the TOMS scheme and cant therefore apply the vat fraction to the margin, this is the first time I have come across a serviced accommodation provider trying to do this so I have no point of reference, has anyone else, Thanks

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By Martin Pooley
02nd Oct 2021 17:58

Long story short, many rent to rent operators are using TOMS but HMRC have yet to find a consistent approach. There may be a test case.

Notice 709/5 para 7.6 describes scenarios in which HMRC will see accommodation as inhouse or, put more simply, falling under normal VAT rules. The facts you describe do not immediately appear to fall within para 7.6.

Why should the rent to rent company be treated as if they owned the property? How do they differ from all the villa specialists who have paid TOMS for years?

Martin Pooley

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