In Realreed Ltd v HMRC [2023] UKFTT 1042 (15 December 2023) the FTT concluded that the taxpayer’s letting of apartments was excluded from the VAT land exemption on the basis that it provided sleeping accommodation in an establishment that was similar to a hotel inn or boarding house. Additionally the taxpayer’s behaviour was careless despite HMRC having conducted several compliance visits over the years without challenging the liability position.
The appellant (Realreed) owned a property known as Chelsea Cloisters. This property contained 656 self-contained apartments. The issue centred on the VAT treatment of 235 of these apartments which were not let on long leases. Realreed argued that the lets were exempt from VAT whereas HMRC contended that they were excluded from the land exemption by VATA 1994 Sch 9 item 1(d) which covered ‘the provision in an hotel inn boarding house or similar establishment of...
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