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HMRC internal manual

VAT Land and Property

Exemption: examples of supplies which are not leasing or letting of immovable property

The following table gives examples of supplies which do not fall within the exemption for land supplies. As in VATLP05800, the list is designed to illustrate how the principles described earlier in this chapter should be applied. The examples are illustrative only and not exhaustive.

Granting Further information
an ambulatory concession, such as an ice-cream van on the sea-front or at a sporting event. The right granted is the right to sell ice cream anywhere along the sea-front or within the sports ground. The right granted to the concessionaire is a standard rated licence to trade and is not a grant of any occupational rights in respect of a specified area of land.
a catering concession in a pub where the caterer is permitted to use the kitchen but then sells his food to the publican’s customers in the pub area. The concessionaire is not granted a specified area from which to cook and sell food. He simply has the use of the kitchen area and access to the main pub area.
What is being supplied is the right to sell food in the pub, the access to the pub customers and the use of the kitchen and other facilities in the public house. This is a standard rated supply of facilities and not the grant of a licence to occupy land.    
  the right to use facilities in a hairdressing salon. Whilst supplies are often described as hairdressers’ chair rentals they normally consist of a number of elements, such as booking/reception services, use of washbasins and driers, etc. The overarching supply is one of hairdressers’ related services and not hire of space even if the other services are minimal. See also ‘Case law about single supplies comprising a bundle of elements’ and ‘Hairdressing salons - chair rentals’ at VATLP06100. The only exception to the above would be where a clearly demarcated area is granted (eg whole floor of the salon) without the addition of services.
  the provision of storage facilities Where the space provided is in a relevant structure (please see VATLP17500 for the definition of relevant structure) and it is used for the storage of goods (by the customer or a third party with the customer’s permission) the supply is standard rated.
  shared business premises (where more than one business has use of the same parts of the premises without having their own specified areas). Neither business has occupational rights in respect of a specified area of land so that in contract or agreement neither has a guaranteed right to operate from the same part of the office, etc. This supply therefore falls short of being a licence to occupy land and is simply the provision of facilities. However, in rare circumstances where tenants, under common control, have a joint right of occupation and right to exclude others the supply may be treated as leasing or letting of immovable property (see Temco (Case C-284/03).