Exemption for licence to occupy land — Not applicable in case of boarding house or similar establishment — Guest house — Permanent guests and casual guests catered for — Different categories of visitors in different parts of house — Whether VAT exemption applicable to services rendered — Whether “establishment of sleeping accommodation” — Appeal by taxpayer dismissed
The taxpayer, M, conducted business until 1988 at 29-37 Hyde Road, Ardwick, Manchester, at premises known as Norman’s Guest House. The property was acquired by M in October 1985. During the relevant period, people stayed and lived there. The permanent or long-term guests accounted for about 80% of the total accommodation, the remainder being occupied by casual guests. The rooms allocated to permanent or casual guests were in different parts of the establishment but the business was in fact conducted as one business. The longer-term guests could stay for a matter of years and some stayed for longer than others. Those who were more permanent could put things in their own rooms, which they were permitted to decorate. They were provided with a separate dining-room and lounge with a television etc. Casual guests were only served breakfast, but there were no cooking facilities and guests did not have access to the kitchen. M appealed against an assessment to VAT in respect of the charges paid by the permanent guests on the basis that the services provided for them were not liable to VAT. A VAT tribunal upheld the assessment but M appealed to the High Court. The Value Added Tax Act 1983, section 17 provided that a supply of goods or services was an exempt supply if it came within one of the categories specified in Schedule 6 to the Act. Schedule 6 was headed “Exemption Group 1 land”. Item 1 provided that the grant, assignment or surrender of any interest in or right over land or of any licence to occupy land was exempt other than (a) the provision in a hotel, inn, boarding house or similar establishment of sleeping accommodation or of accommodation in rooms which were provided in conjunction therewith or for the purpose of a supply of catering. The question arose whether the Customs and Excise were right to contend that Norman’s Guest House came within the words “the establishment of sleeping accommodation”.
Held The appeal was dismissed
1. An appeal to the court against a tribunal decision lay only in connection with any point of law which might be raised. There might be cases involving questions of mixed fact and law and it might be that to some extent the instant case was one of them but strictly there was no point of law.
2. The VAT tribunal had listed all the attributes of Norman’s Guest House and concluded that they could apply to a hotel or guest house. It therefore asked whether there was anything that could distinguish it from a hotel or boarding house. The tribunal had taken the view that hotels had long-stay residents who had no other place of residence. Such permanency might distinguish one guest from another but did not affect the function and description of the establishment. In those circumstances Norman’s was exactly what it described itself as in its title, a guest house. That had to be either a hotel or boarding house or, if not, was so close as to be a similar establishment.
3. There was no flaw in the tribunal’s reasoning and it had not misled itself on the facts.
The taxpayer appeared in person; and Robert Jay (instructed by the solicitor for Customs and Excise) appeared for the Commissioners.
