HMRC’s VAT policy on new build student accommodation has been successfully challenged. The case should bring significant cash flow savings for student accommodation contractors, although the application of the landmark judgement will depend on the precise circumstances of each development around the wording of planning consents.
A very interesting case, that if relevant, could have a big impact on certain contractors. Bearing in mind the volume of student developments in recent years, it could be huge, if nothing else it will certainly keep the accountants busy!
Glyn Edwards, VAT director at MHA MacIntyre Hudson, who brought the challenge, says that the outcome will create significant cashflow savings for student accommodation contractors, who should no longer be required to pay 20% VAT on subcontractors’ services.