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Can a charity reclaim past input vat on lease of building?

Client is a recently registered charity. It was incorporated on 30/9/2007 but only became a charity in October 2012. HMRC has written to them saying that they would be recognised as a charity with effect from 30/9/2007.

The charity leases a building for its charitable activities and the landlord has been charging vat on the rentals. Had it been a charity since incorporation then it would have been exempt from Vat on rents.

Is there scope under the relevant rules to reclaim the vat paid on rentals, in light of HMRC's back dating the charity status to when the company was incorporated?

The Charity is not vat registered.

Thanks for advice

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By BKD
07th Feb 2013 09:33

Possible (partial) reclaim

It would be unlikely that HMRC would entertain a direct claim from the company itself. It should be up to the landlord - presented with HMRC's confirmation that the company has been a charity throughout - to make a claim to HMRC for wrongly charged output VAT and to pass on the refund to the company. Any claim likely to be limited by the 4-year cap.

Of course, the landlord may be less than happy if there is an impact on his own input VAT recovery.

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By ICONS
05th May 2015 13:34

Reclaiming back VAT on Lease?Rent

We are in Exactly the same situation, our estate agent has been messing us about for one year,  now they say they can not do anything about vat paid prior to registeration, I wounder if we could keep some rent back so the court could decide if the landlord is obliged to help us in our situation. after all he has charged us the V A T, so he has to refund us. Really we are confused and need helpless !!!

Any kind of help will be appreciated,

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