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RSM warns about wedding venue tax risks


RSM, the Eastleigh-based accountancy firm, has warned hotels and other venues licensed to host weddings to check their tax position in respect of receptions, after a recent tribunal decision has left one hotelier with a bill of more than £50,000 for unpaid VAT


The case was brought by the owners of the Glendorgal Hotel in Newquay, Cornwall, one of the Blue Chip Hotels. HMRC assessed the company for over £50,000 of underpaid VAT relating to the hire of the hotel's Tamarisk room, which was licensed to host civil wedding ceremonies. HMRC argued that VAT should have been charged on the Tamarisk room hire charge if the hotel was also used to host the wedding reception. The tax tribunal


agreed with HMRC that the hire of the room was subject to VAT at the standard rate of 20%.


The tribunal made this judgment, however, for a different reason than that argued by HMRC. Its view was that as a wedding licence must afford the general public access to a wedding ceremony, the wedding couple could not have the “exclusive” use of the room required to exempt the supply from VAT.


The hire of the room for the ceremony was therefore a separate supply, subject to VAT.


Philip Munn, a VAT partner at RSM in Southampton, said: “Organising a wedding is incredibly expensive and this decision will mean that engaged couples will now be much less likely to be able to hire a licensed wedding venue that doesn't charge VAT.


“There is also a real danger that hotels could find themselves coming under HMRC's microscope. There are more than 80 hotels offering licensed wedding facilities across Hampshire alone who are now at risk of being audited by HMRC to determine how they account for VAT. We've also recently seen an increasing willingness by HMRC to challenge or restrict VAT recovery on refurbishment of hotels correctly treating income as VAT exempt.”


Myddelton & Major reports new development almost sold out


Salisbury-based chartered surveyors Myddelton & Major, agents for phase three of the Glasshouse Studios in Hampshire, have reported that 10 out of the 12 units have been pre-let or sold, even before construction ends.


The timber and glass office scheme, developed by HHM Developments, comprises two separate terraced buildings, with six self-contained offices in each, on a sloping landscaped site with sweeping views across Avon Valley fields towards the western escarpment of the New Forest.


BrightSpace, the architectural practice founded in 2010, now employing 25 people, and led by directors Eric Sey, Mark Amey and Martin Dobbs, designed the scheme with the developer. It will be the anchor occupier, having signed a lease on the entire first floor on the lower terrace.


Philip Holford, the senior partner at Myddelton & Major, said: “The vast majority


of the designed-for-use office space has been taken up by expanding smaller businesses attracted by the unique environment. The strong demand demonstrates that there is genuine appetite for high-standard offices in and around the Avon Valley and away from commuter hotspots such as Ringwood, Bournemouth, Southampton and Salisbury.”


He added: “Another demand factor is also coming into play across the region – a number of offices are being converted into flats, under permitted development rights, further squeezing supply.”


HHM Developments of Fordingbridge, which specialises in bespoke commercial, residential and agricultural builds, took less than 12


THE BUSINESS MAGAZINE – SOLENT & SOUTH COAST – JULY/AUGUST 2016


From left Philip Holford of Myddelton & Major, and Dennis Hall and Rob Hibberd of HHM Developments


businessmag.co.uk


months to complete the scheme, including land purchase, design, planning permission and construction.


Glasshouse Studios has three main buildings: The Glasshouse, with 10 offices, The Courtyard, with nine offices, and the 12 offices in the latest phase.


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