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Charity request to disapply the option to tax

A straw poll - Can this charity request that the landlord disapply the option to tax?

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Hi

Let's say a charity has an income of £100k per annum.

£50k is from a big lottery grant, for non business activity.

£50k is from primary purpose trading and it is also a business activity.

They have chosen to not register for vat for the busines activity - not a problem being beneath the vat registatrion threshold.

They rent 2 buildings. Building 1 is used wholly for the big lottery activity and building 2 is used wholly for the the primary purpose, busines activity,  trading

The landlord for both buildings has opted to tax them.

They have certified with the landlord that building 1 is used for a relevant charitable purpose so the option to tax is  disapplied and the rent, therefore, is exempt from VAT.

STRAW POLL QUESTION:

Is it legitimate for the charity to also certifiy that building 2 is used for a relevant charitable purpose?

My answer is no.  Even though the the activity is a charitable purpose it is also a business activity and only non business activity can be exempted from the option to tax.  The fact that they have not vat registered doesn't make the activity non business.    business is business....

STRAW POLL QUESTION 2:  Assuming the answer is No for Q1.  If it was just one building without clearly defined areas of activity within it.  Can the disapplication be applied at all?

my answer is  No. The possible relief is lost as it can't be identified which part of the rent cost is attributable to non business activity.

 

thanks

 

 

 

 

 

 

 

 

 

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