Labour camps and labour accommodation are generally areas where labourers are housed by their employers. They can take many different forms and some may provide residents with additional services on top of the living accommodation. It is therefore necessary to consider on a case by case basis whether labour accommodation is:
- a residential building, and therefore exempt from VAT (or zero-rated if the first supply); or
- serviced accommodation, and therefore standard rated.
There will be instances where the supply of certain labour accommodation shall be a supply of residential property, and other instances where the supply of certain labour accommodation shall be a supply of serviced accommodation. The distinction is important as it will affect the VAT liability of the supply. Suppliers are required to consider the extent of the additional services supplied along with the accommodation in order to determine the nature of the supply. Suppliers should also consider whether they are making a single composite supply, or whether they are making a mixed supply of severa...