The Supreme Court’s rejection of HMRC’s arguments for determining whether Secret Hotels2 Ltd was an intermediary or whether the company was ‘acting in its own name’, may now make it easier for some businesses to adopt an agency business model, writes Damon Wright
The facts in HMRC v Secret Hotels2 were that Secret Hotels2 Ltd (formally Med Hotels Ltd known as Medhotels) was a UK established holiday accommodation broker (known in the industry as a bed bank) owned by lastminute.com.
The following summarises the accommodation booking chain:
The trade was sold to Thomas Cook and the company became dormant changing its name to Secret Hotels2 Ltd.
Before this HMRC issued assessments for £7m on the basis that Medhotels was liable for UK VAT under the tour operators’...
