Fortyseven Park Street Limited appealed against HMRC's initial decision to treat supplies made to individuals in relation to the use of residential properties in London and the provision of related benefits as a standard rated supply of membership of a plan, or of accommodation in a hotel or similar establishment as opposed to an exempt supply of land.  The Appellant grants fractional interest in the properties and also allows ‘non-members' to occupy the properties at a commercial rate when they are not in use by members, who hold an interest. In addition to the use of the property, other services such as a free Wi-Fi, a daily maid service and a concierge service are provided. When approaching the classification of this supply, it was considered what was obtained by the members who entered into an agreement with the Appellant. The conclusion reached by the First Tier Tribunal was that once a member entered into a contract for the fractional interest of a property, they were paying for short stays in an environment that was a similar establishment to that of a hotel, given the additional services that were provided, and therefore there were no grounds to define these supplies as ones of land which would therefore be exempt from UK VAT. If you are making supplies and are unclear on how they would be defined for VAT purposes, call our free VAT helpline for expert advice.

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