we have a vat regd client who has advised us that there was holiday let income for tax year 2010/11 - before I speak with client need to consider that as the client is already vat regd our view is that vat will/may be due on this source as it is treated as trading income - is this correct? if so can the client decide not to treat the let as a holiday let but as normal rental income and therefore with no vat implications but missing out on any trading tax benefits?- thanks for any comments
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Mutually exclusive
VAT treatment does not depend on income tax treatment, and vice versa. If the supply is one of holiday accommodation, and that is a question of fact - not election, it is standard-rated.