VAT Treatment of Serviced Apartments: The Realreed Limited Case – Latest Court Ruling

• The issue in the Realreed Limited case was whether serviced apartments qualify for exemption from VAT.
• Realreed owns a property called Chelsea Cloisters in London, which includes 235 apartments that are let out.
• Realreed argued that the letting of the apartments is exempt under The VAT Act 1994.
• HMRC contended that the use of the apartments is not exempt because they are similar to a hotel.
• The court found that Chelsea Cloisters is an establishment in potential competition with the hotel sector.
• The court interpreted ‘visitor or traveller’ as someone who is not staying with any degree of permanence.
• The court found that Realreed provided furnished sleeping accommodation, so the remaining question was whether Chelsea Cloisters is suitable for use by visitors or travellers.

Source: deeksvat.co.uk

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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