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HMRC internal manual

VAT Land and Property

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What is a 'similar establishment' to a hotel, inn, or boarding house?: who are 'visitors or travellers' for the purposes of Note (9)?

Note 9 makes it clear that ‘similar establishment’ includes premises either used by visitors or travellers or held out as suitable for use by them, which consists of ‘furnished sleeping accommodation’. This consequently brings accommodation, such as serviced flats advertised for use by visitors and travellers, within the meaning of ‘similar establishment’. For the purpose of Note (9) the level of additional services being provided is irrelevant

A number of tribunals have considered the meaning of the term ‘visitors and travellers’, including International Student House (ISH) LON/95/3142 and Acorn Management Services Ltd (VTD 17338). In the absence of a statutory definition the tribunals have applied the ordinary natural meaning of the terms. ‘Visitor’ has been taken to mean a person who pays a visit, or visits a place or person - it does not include a resident. ‘Traveller’ on the other hand has been defined as person who is travelling, or journeying, or going from place to place.

In ISH the tribunal found that because the students remained in the UK for several years they were not ‘visitors and travellers’. This contrasts with the position in Acorn, where the courses were of shorter duration (average 15 weeks).

What is not clear is where the cut-off point lies, though it could be concluded that if a person intends to reside for a fixed and lengthy period, such as the duration of a university course, they are unlikely to be seen as visitors and travellers. Despite its conclusion that students were not visitors and travellers, the tribunal in ISH refrained from indicating at what point a person would cease to be visitor and traveller. It said, ‘…there must be a moment when a person who resides in a place which is his home ceases to be a visitor to that place. In the normal everyday use of the English language a person whose residence has a degree or permanence is neither a visitor or traveller’.

The tribunal in Acorn had to consider whether the 15 week stay by their students represented a sufficient degree of permanence. It summarised the position as follows:

‘It is difficult to say exactly when a person ceases to be a visitor on the basis that his stay has that degree of permanence referred to in ISH but we have concluded that whenever that time occurs it does not occur during the average stay of the student in this case. In finding this we have taken into account that the students in the present case are in the United Kingdom for a purpose. That expressed purpose is not to make a general visit to the United Kingdom (although the student may well take the opportunity to visit different places while he is here) but to pursue a course of study which happens to take place here. Even so, this does not in our view prevent him from being a visitor’.

In establishing whether accommodation is ‘used or held out as suitable for use by visitors and travellers’ evidence of the way in which it is advertised in newspapers, brochures and through roadside signs will be significant. ‘Used by’ in Note (9) also denotes regularity of use. This was confirmed by the tribunal in GR & JM Holding VTD19573, which took the view that occasional use by a visitor or traveller was insufficient to bring premises within Note 9.