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HMRC internal manual

VAT Land and Property

Hotels and similar establishments (Item 1d): supplies to the Home Office

Where accommodation is provided for asylum seekers as a result of contracts between accommodation providers and the Home Office, the supply of accommodation services is treated as made to the Home Office and not to the individual asylum seekers.

The same approach applies where local authorities contract with hotel owners or other proprietors for the accommodation of homeless people. Where additional services are supplied, such as transport and translation services, these are treated as incidental to the main supply and follow the same liability.