Flat balconies

Do you provide hostel or similar accommodation?

Recent VAT case won against HMRC

Rob Warne, Partner, Head of VAT and Customs Duty
Flat balconies

If you are an organisation providing hostel or similar accommodation you can take note from the First Tier Tribunal case of City YMCA London. In this alert we highlight what the outcome may mean for you.

Background into the matter

YMCA London and HMRC were both arguing the supply of hostel accommodation was vatable.

However, HMRC considered the supply failed to be of land, and YMCA argued it was land but similar to hotel accommodation. The key point here is that YMCA's position allowed it to apply the '28-day rule'. This means they could apply a reduced rate of VAT as long as people signed up to a stay of more than 28 days, and at the same time were able to recover VAT on the associated costs. HMRC's position would have denied the application of the '28-day rule' and the recent COVID measures allowing a reduced rate for hotel (and similar) accommodation – HMRC lost.

What does this mean for you?

While this is a First Tier Tribunal decision, and thus does not set a legal precedent (and may be appealed), it seems clear cut that HMRC have got its position wrong. If you make similar supplies, it seems there is an opportunity here to correct the position and perhaps make claims. 

Further information

Please get in touch with Robert Warne or your usual Crowe contact if you wish to discuss any of the above issues further.


Contact us

Robert Warne
Rob Warne
Partner, Head of VAT and Customs Duty services