PROPERTY INCOME - 30.11.2023
Are rooms rented out by beauty salon exempt from VAT?
One of our subscribers trades as a hairdresser and needs to raise extra income by subletting rooms in her salon to other traders in the beauty industry. Will she charge VAT on these supplies?
OPTION TO TAX - 31.10.2023
Property owned for 18 years: VAT on sale?
Q. Our business has owned the freehold of our trading premises for 18 years. We opted to tax the property when we purchased it in 2005 because we sublet the upper floor, so wanted to avoid a problem with our input tax claim. We are thinking about selling the property and relocating to another part of the city. Must we charge VAT on the proceeds? ...
CAPITAL GOODS - 31.08.2023
Change of building use: will you need to repay VAT?
You purchased your office premises six years ago but have decided to move to a different location and rent it out to a tenant. What potential pitfalls must you consider with the capital goods scheme?
VAT CASES - 31.08.2023
Should HMRC have refused company’s option to tax election?
The case. Rolldeen Estates Ltd (R) purchased a building and submitted Form VAT1614A to HMRC to notify an option to tax election from 10 January 2008. It subsequently claimed input tax on repairing and improving the building and charged VAT on rent to tenants. The building was sold in 2015 and no VAT was charged. HMRC issued an output tax assessment for £50,000 but R argued that the assessment was incorrect because the company had made previous exempt supplies of the building before its option to tax election in 2008 and should therefore have asked for HMRC’s permission to opt to tax, which had not been done. The option was invalid, it claimed, so the sale of the building was exempt from VAT. ...
INPUT TAX - 31.08.2023
Should we sell converted flats to a connected party to claim input tax?
Q. Our company has converted a disused office block into six flats, which we will rent out on a long-term basis. We used a building contractor on a ”design and build” basis so that all construction costs, building materials and professional fees were subject to 5% VAT. As I understand it, we cannot claim this VAT as input tax unless we sell the flats to an associated business. Is this correct? ...
CONVERSIONS - 27.06.2023
Converting a part-residential property into houses
A subscriber is purchasing the freehold of a ground floor shop and first floor flat and will convert the property into two houses and sell them. Can they claim input tax on the project costs and is there an alternative approach that is more VAT efficient?