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HMRC internal manual

VAT Government and Public Bodies

HM Revenue & Customs
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Police authorities: specific activities: asylum seekers

Asylum seekers may be temporarily housed and fed in police cells and the costs recovered from the Home Office. This is not the same as bed and breakfast accommodation and so is not provided by way of business. There is no supply to the Home Office and no consideration paid by the asylum seeker. Therefore no VAT is due on the payments received from the Home Office and any VAT incurred can be recovered under section 33 (see VATGPB4000).