VAT on rental?

VAT on rental?

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I have 2 scenarios

1. Client rents desk space in their office, they are VAT registered, should they charge VAT?

2. Client sublets a property to another company (with the consent of the landlord) - should they charge VAT?

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Euan's picture
By Euan MacLennan
01st Nov 2011 10:14

Yes & No

1.  Yes (probably).  This is similar to renting a chair in a hair dressing salon.  Unless it is a separately partitioned office or the lease agreement clearly defines the (desk) space (in which case, it would be an exempt supply or if opted to tax, standard-rated), it is likely to be regarded as the provision of a serviced office facility (standard-rated), which would almost certainly apply if it is just one desk in the corner of a general office.

2.  No - unless they have opted to tax the property, in which case it would be standard-rated.

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