HMRC have issued new guidance on the meaning of “occupation” following the House of Lords judgement in Newnham College, which went in favour of the taxpayer.

HMRC has accepted that mere physical presence alone is not sufficient to qualify as “occupation” – it must be accompanied by some element of actual possession or exclusivity which may arise from the grant of a legal interest or licence. In practice it means that the option to tax will not be disapplied if the user of the property only has a physical presence with no further interest.

Further details are here http://www.hmrc.gov.uk/briefs/vat/brief3309.htm in HMRC Revenue & Customs Brief 33/09.

HMRC invite applications for overpayments of VAT that may have arisen due to their original interpretation of the law.

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