VAT on rental

VAT on rental

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 I the tenants of the property are not charged VAT, can there be made a claim for the inputs like repair and renovation of the property?

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By User deleted
01st Dec 2014 17:01

Who knows?

You haven't given nearly enough information to allow anything like a helpful answer.

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Euan's picture
By Euan MacLennan
02nd Dec 2014 09:18

Probably not

If VAT is not being charged on rent, it is either a mistake or a VAT exempt supply - either because it is a residential property or because it is a commercial property which the landlord has not opted to tax.  If the rent is a VAT exempt supply, you cannot reclaim input VAT incurred on any expenditure on the properties concerned.

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By Nev Bookkeeping
02nd Dec 2014 09:19

Sorry,

It is a commercial property and part of the rental agreement is the property to be decorated in a specific way. The property is owned by a VAT registered company, but they have not opted to tax. Can the VAT on these decorations be claimed?

 

 

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Replying to Newb121:
Euan's picture
By Euan MacLennan
02nd Dec 2014 09:34

Definitely not

Nev Bookkeeping wrote:

It is a commercial property and part of the rental agreement is the property to be decorated in a specific way. The property is owned by a VAT registered company, but they have not opted to tax. Can the VAT on these decorations be claimed?

... if it is the landlord company which is paying for the redecoration of the commercial property.

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RLI
By lionofludesch
02nd Dec 2014 09:40

Still not enough

Come, come.  We're having to drag it out of you.

Who's paying for these decorations ?

The landlord ?  Or the tenant ?

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Euan's picture
By Euan MacLennan
02nd Dec 2014 11:33

Do you think ...

... that they might be Christmas decorations?  :-)

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By Nev Bookkeeping
02nd Dec 2014 16:47

It is the landlord.

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RLI
By lionofludesch
04th Dec 2014 10:14

Partial Exemption

Then your last hope is the de minimis provisions.

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Replying to lionofludesch:
Euan's picture
By Euan MacLennan
04th Dec 2014 11:06

Are you sure?

lionofludesch wrote:

Then your last hope is the de minimis provisions.

I thought the rules were that where the inputs are specific to a supply, you first allocate the inputs to the VATable or exempt supply and then, you're left with the general inputs on which you can reclaim the input VAT if it amounts to less than the de minimis threshold.  As these costs relate to an exempt property, I don't think you have any hope of claiming the input VAT.  I haven't done a partial exemption case in years, so I might well be wrong.

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RLI
By lionofludesch
04th Dec 2014 11:54

Funnily enough .....

.... I was on a VAT seminar yesterday where it was pointed out that a trader with a bit of rental income can claim back the VAT on repairs and estate agent's fees - even though the rental activity is not part of his trade - so I'm pretty confident.

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