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Posted Sat, 08 Jan 2022 16:31:11 GMT by Dyad
I have a questions relating to: HS253 Furnished holiday lettings (FHL) "Do not count longer-term lets of more than 31 days" 1) Does this rule apply to company bookings where the accommodation is used by a succession of short-term occupants? Can I assume it works the same as (VAT Notice 709/3) "The rule does not apply to bookings by companies where the accommodation is used by a succession of short-term occupants, and each stay is less than 29 days at a time."? 2) The second question is; if an individual stays for 31 days, * Can they leave for one night and come back for another 31 days? * Can they move to another unit (Cottage, Chalet, caravan etc...) after 31 days with a new booking so the continuous days start again?
Posted Tue, 11 Jan 2022 11:51:01 GMT by HMRC Admin 10
Hi

Thank you for your question.

VAT Notice 709/3 explains how supplies by hotels, inns, boarding houses and similar establishments should be treated for VAT purposes.

For income tax purposes the legislation is contained within the property income rules in ITTOIA 2005, and specifically in:

Income Tax (Trading and Other Income) Act 2005

This relates to the qualifying conditions for FHLs.

Also see our Property Income Manual here:

Furnished holiday lettings

A ‘period of longer-term occupation’ is a continuous period of more than 31 days during which the accommodation is in the same occupation (otherwise than because of circumstances that are not normal).

An example of  ‘not normal’ is if the holidaymaker either: falls ill or has an accident and can’t leave on time.

Whether there is a longer-term occupation is a question of fact.

To the extent that the property is let to the company and the company is entitled to occupy under the terms of the rental agreement; then you would need to consider whether there is a ‘period of longer-term occupation’ by reference to the company’s occupation.

Regards.
Posted Fri, 28 Jan 2022 17:47:09 GMT by Dyad
Thank you for taking the time to reply and providing me with all the this information, unfortunately I have read these documents already and none the wiser. Sorry to bother you again, but I'm not sure that you have answered either of my questions in a way that I can understand. 1) Does this rule apply to company bookings where the accommodation is used by a succession of short-term occupants? Example; The Company books a unit for 6 months, but the unit never has the a person staying longer then 5 days in concession. You say "by reference to the company’s occupation" "company's is a possessive form of company and it represents" so can I assume employee's and not the company? Would you also be so kind and reply to question 2) The second question is; if an individual stays for 31 days, * Can they leave for one night and come back for another 31 days? * Can they move to another unit (Cottage, Chalet, caravan etc...) after 31 days with a new booking so the continuous days start again? The rules say "the accommodation is in the same occupation", so if they change unit (accommodation) on the same complex then can I assume this is okay?
Posted Fri, 04 Feb 2022 06:07:10 GMT by Dyad
Hello HMRC Admin 10, Occupancy - Under English law, the possession and use of property by or without agreement and without any claim to ownership. So surly the "Occupancy conditions" must apply to the person(s) that took "possession and use of property" and not the person/company that an agreement is with. Accommodation - Under English law, a dwelling is defined as a self-contained 'substantial' unit of accommodation, such as a building, part of a building, caravan, houseboat or other mobile home. A tent is not normally considered substantial. If accommodation is a self-contained unit, then each unit is treated individually. So yes to both of my questions. * Can they leave for one night and come back for another 31 days? * Can they move to another unit (Cottage, Chalet, caravan etc...) after 31 days with a new booking so the continuous days start again? I would appreciate it if you would take the time to confirm. Kind regards
Posted Fri, 04 Feb 2022 06:30:50 GMT by HMRC Admin 18
Hi,

Your earlier question has been referred for technical guidance. We will contact you when a full response is held.

Thank you.

 
Posted Tue, 07 Jun 2022 14:02:05 GMT by HMRC Admin 19
Hi,

Thank you for your further questions. In answer to your questions:
                             
1. This depends on the facts concerning the booking. In this case it seems the company are making a block booking with a landlord.  

The first qualifying condition that must be met is the availability condition, the accommodation is available for commercial letting as holiday accommodation to the public generally for at least 210 days. So the landlord, the person or company that the company books the unit from, must have the property available to the general public. As long as it is it will satisfy the condition even if one client, in this case the company, makes a long booking.  

However depending on the facts this arrangement may not satisfy the condition if the landlord is not actually making the accommodation available to the general public.

The second qualifying condition is the letting condition, the accommodation is commercially let as holiday accommodation to members of the public for at least 105 days. Again by letting for a period of six months this will be satisfied as long as the facts demonstrate that the holiday accommodation is let to members of the public and any arrangements with the tenant company do not contradict this.

The third qualifying condition is the pattern of occupation condition (not more than 155 days fall during periods of longer-term occupation. A “period of longer-term occupation” is a continuous period of more than 31 days during which the accommodation is in the same occupation otherwise than because of circumstances that are not normal). In the circumstances you describe the company is making a booking for six months and this constitutes a single period of occupation of more than 31 days. This would also represent on it’s own a period of greater than 155 days in total so the pattern of occupation condition would not be satisfied.

Overall the legislation is clear that in order to qualify as an FHL the purpose of the letting must be as a commercial let as holiday accommodation to members of the public.

2. In the case you describe the landlord has let the property to the company. Whether the occupants allowed to use the accommodation by the tenant company change or move accommodation is irrelevant, as the accommodation is in the same occupation (let to the company) for the entire period.

Thank you.

 

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