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HMRC internal manual

VAT Land and Property

What is a 'similar establishment' to a hotel, inn, or boarding house?: characteristics and functions associated with hotels, inns and boarding houses

The following is a list of characteristics and functions often associated with hotels, inns and boarding houses.

Clearly, for something to be a ‘similar establishment’ it is not necessary for all the features to be present; in many cases a small number of features will be sufficient to conclude that the establishment is similar to, for example, a basic hotel or boarding house.

  1. The accommodation is provided on a temporary basis, generally to persons who are away from their home. It is accommodation for a transient class of people or people who are temporarily homeless (but see paragraph 2.1, Notice709/3). It is taken with a view to moving on in due course.
  2. The hotel or similar establishment provides the accommodation as its main purpose, generally with a view to making profit. Providing the accommodation represents the main commercial exploitation of the property. In this respect the establishment will differ from one whose function is educate, imprison or provide care and support. Equally, an establishment which aims to provide pastoral care or create a family concept, such as some educational establishments, is unlikely to be a similar establishment.
  3. The hotel or similar establishment will normally provide accommodation on a non-selective basis to persons who turn up and can pay.
  4. They usually provide breakfast. However, this is no longer the case with all such establishments. Some hotel chains, for example, now provide only sleeping accommodation. Breakfast can be provided as a prepared meal or as basic ingredients (a food parcel). The provision of breakfast in the form of a supermarket voucher is not seen as a characteristic of ‘hotel’ accommodation.
  5. Sleeping accommodation is provided with a range of services and facilities, such as room service, laundry, cleaning of rooms (as opposed to cleaning of common areas), bed making, TV rooms, telephone services, receptionist, etc. The level of services will vary according to the status of the establishment. The service provided in a bed and breakfast establishment, for example, might be very basic, consisting of no more than room cleaning and laundry. This would not in itself prevent it from being treated as a ‘similar establishment’.
  6. Residents will normally enjoy a degree of privacy by being provided with their own lockable rooms.
  7. There will normally be a resident manager, proprietor or member of staff on the premises at all times. Some establishments may have annexes where this is not the case. However, management will be contactable at the main premises. Greater supervision and management is a feature of this sort of accommodation.
  8. There is normally a booking service.