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speaking for many AW regulars
We wish you well as you challenge HMRC. I will be following developments with interest.
Surely can't fail
I can't imagine how this could go wrong. After all, if it were the other way around, that is to say, if a business called their latest development by some term other than what it was actually intended for simply to avoid paying VAT then HMRC would be all over them saying it doesn't matter what it's name is, the tax treatment follows the function.
That is of course quite correct but also means they are clearly in the wrong here, how can a homeless charity building a residential facility for those it helps be seen to be using it as anything other than a homeless shelter. It's disheartening in these times when HMRC is stretched so thinly with their numerous cutbacks to see them wasting time and effort on such frivolous cases, particularly one which no member of the public would ever support them in.
Well done Simmons & Simmons! But why?
The charity has done very well to receive assistance in challenging HMRC's decision, but how many more have fallen into this kind of trap who cannot get assistance to fight their corner? It is standard practice to have some additional facilities with homeless hostel and similar accommodation to help people into work, etc. It is an essential part of charitable activity and part of social housing. The space this activity takes up compared to the actual accommodation for homeless people is negligible. Now HMRC has made this decision it will want to dig its toes in (are we talking targets here?) and there will be an expensive and unnecessary fight. (This seems to be a similar case to the Hoylake Hospital Charitable Trusts case (2011) where HMRC tried to standard rate the kitchen and laundry for the hospital, but this was overturned on appeal.).