Thank you for your post. I've just been asleep (or rather busy). I must say, this is one of the most awkward areas I have come across for quite a while; particularly as it must be a pretty common question now that Airbnb makes it so easy to let out space.
I've read the article you kindly linked to, and asked the internet for further advice on it elsewhere. Sadly the internet points out that a lease of the holiday property within the 1954 Act is only possible when the property is being let to a commercial enterprise (i.e. the company that employs the individual), not an individual. That said there are important and helpful bits in the article, thank you.
It appears to me that:
Sch 9 Part II Group 1 Exempt is the grant of any interest in land, other than: (e) the grant of any interest in, right over or licence to occupy holiday accommodation.
VATLP12100 states "The provision of holiday accommodation is standard rated." The definition in VATLP12200 includes “any accommodation in a building, hut (including a beach hut or chalet), caravan, houseboat, tent or other structure held out as suitable for holiday or leisure use.”
If we look at 709/3 there is the the following comment reference off season holiday accommodation - so i would say its not necessarily a given that all income is standard rated - if its possible that the circusmtances in 5.6 may be met.
Yes, indeed, an excellent point, thank you. I had sort-of reached that point, but then lost sight of it so am very appreciative of your observation re para 5.6. What is interesting is that HMRC's view is that London does not have an off-season. HOWEVER, the Mayor has introduced a rule that restricts letting of property to 90 days per annum where the letting periods are shorter than 90 days. So it seems to me that anything outside the 90 days of short lets should be 'off season' as you patently can't have a FHL in London.
ALTERNATIVELY it just isn't holiday property, as anything being advertised and let for longer than 90 days just isn't held out as being suitable for holiday use.
BUT, it's less helpful with B-and-B-type accommodation. However, is letting a spare room in your own family home really within 709/3 Para 2.1
"Hotels, inns, boarding houses and similar establishments"? "Establishments with similar characteristics to hotels, inns and boarding houses, and any premises, in which furnished sleeping accommodation is provided, that are used by or held out as being suitable for use by visitors or travellers (but not if such use is only occasional).This includes motels, guesthouses, bed and breakfast establishments, private residential clubs, hostels, and serviced flats (other than those for permanent residential use)."
Perhaps your own home just doesn't have any characteristics similar to a hotel. It does seem a little odd that you can get Rent a Room relief, but would be hit by VAT if you are VAT registered - a barrister for instance.
So further questions:
A. Is something being let for 90 days being held out as suitable for holiday use?
B. Is anything in London that is outside the 90 days that is permisable for short lets 'off season' for all that HMRC do not accept that London has an off season?
C. Is letting a spare room in your own family home a "Hotel, inn, boarding house or similar establishment"?
Tentative conclusion with regard to my initial questions:
1. Probably not VATable as it's not a 'similar establishment'
2. Probably not VATable as it's not a 'similar establishment'
3. VATable as holiday accommodation.
4. Not VATable (provided rented for more than 90 days to comply with the Mayor's rules) as out of season.
5. As 4.