Question to the HM Treasury:

To ask the Chancellor of the Exchequer, for what reason HMRC has introduced new guidance on the payment of VAT on costs for the provision of site-based staff at (a) sheltered units of accommodation and (b) other such developments.

There has been no change in government policy in this area. Service charges payable by residents to a landlord are exempt from VAT and continue to be so. Equally, the supply of any on-site staff to an individual, landlord or company has, since the inception of VAT, been a taxable supply.

HMRC became aware that a number of property management and similar companies had not been correctly accounting for VAT on their services, thereby giving them an unfair advantage over their competitors.

To address this, on 7 September 2018, HMRC issued a Revenue and Customs Brief 06/2018 and associated documents to publicise the correct VAT treatment in respect of goods and services, including staff, supplied by a property management company or similar to a landlord or a “Right to Manage” (RTM) company. These documents are available via the gov.uk website.