Following the recent decision by the First-tier Tax Tribunal in favour of Errol Willy Salons Ltd (a hair salon in Cardiff), businesses renting out a spare room can breathe a sigh of relief as HMRC’s attempt to circumvent the VAT exempt status of rent charges fails. This means that any businesses letting out a room to a tenant won’t necessarily be subject to an additional VAT charge even if facilities, such as toilets and reception services, are provided to the tenant.
Source Macintyrehudson
