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HMRC internal manual

VAT Government and Public Bodies

Police authorities: specific activities: housing

Police authorities own housing stock known as ‘section’ housing. Under the Police Regulations 1987 and 1995 officers engaged continuously from before 1 September 1994 have a right to accommodation as a clause in their contract of employment. Rents received from officers with these reserved rights are non-business. However, rents received from officers without reserved rights are exempt business income.

Payments received for self-contained accommodation provided to visitors, for example:

  • relatives or friends of residents, or
  • visiting police officers from another force attending a conference

are received by way of business and follow the holiday accommodation VAT rules.

Any disposal of section housing (unlike the disposal of local authority housing) is a business activity. It is unlikely to fall within ‘person constructing’ rules because most of the housing was built when the police were part of local authority VAT registrations. Most police authorities were not individually VAT registered until 1 April 1995.