The UT concludes that the hire of a room licenced for civil marriage ceremonies is not exempt.
This case concerns wedding packages provided. The hotel has an approved room under the Marriages and Civil Partnerships (Approved Premises) Regulations 2005. Where the room was hired, the taxpayer treated this as a separate exempt supply of a right over land. HMRC considered that there was a single standard rated supply. The earlier First-tier Tribunal (FTT) considered that the supply of the room was a separate supply. However, it concluded that this was not an exempt supply of a right over land, placing emphasis on the regulations, which precludes exclusive occupation by the customer on the basis the public has to be granted admittance to any area licenced for civil ceremonies. The taxpayer appealed. HMRC did not appeal against the FTT’s conclusion that the hire of the room was a separate supply. The Upper Tribunal (UT) agreed with FTT’s conclusion, although for different reasons, that the supply was not exempt.
In reaching its decision the UT focused on two points:
Right to occupy the room as owner and exclude any other person
The UT noted that in Temco (C-284/03), the Court of Justice of the European Union (CJEU) specifically states that the right to exclusive occupation. Therefore, a letting may include parts which are used in common with others. The UT observed that the ‘right to exclusive occupation’ does not mean that the test is simply whether the tenant can insist on being the sole occupant. In the current case, under the Regulations, the public’s right of access is restricted to the proceedings. The UT concluded that just because the customer could not assert exclusivity this does not prevent there being the necessary quality of exclusivity. The UT disagreed with FTT on this point but noted this does not resolve the issue in the taxpayer’s favour.
Did the taxpayer add any significant value to the hire of the space?
The taxpayer argued that the FTT, having held that there was a separate supply of the room, should have disregarded the other supplies by taxpayer when determining the nature of the supply of the room i.e. the FTT wrongly linked the supply of the room with the supply of other wedding package services. The UT noted that the CJEU has have made it clear that a supply cannot be characterised as an exempt leasing or letting of immovable property if the landlord does more than simply make property available.
Whilst agreeing with the conclusion, the UT disagreed with the earlier FTT’s reasoning. The UT was not of the view that the customer was buying a right of participation in a wider event. The UT’s view was that when the supplier was providing a room, approved under the regulations, the room had to be ‘a seemly and dignified venue’ for such proceedings. The taxpayer had to meet the obligations imposed on it, such as making a responsible person available and supervising the use of the room. That was a more complicated service than simply passively making the property available and by its active exploitation of the room the taxpayer added significant value. The UT added that the customer paid for more than just use of the room and its contents (desk, chairs etc.). The UT therefore concluded that the hire of the room did not fall within the scope of the exemption and the taxpayer’s appeal was dismissed.
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