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Invoice addressed to Landlord

VAT invoice addressed to landlord

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Utility invoices are addressed in landlord`s name. Landlord then requests payment based on the invocie value. He hands over the invoice to client.

My question is: can VAT be claimed even when no invoice is issued by the landlord? i just have the actual invoic from utility company addressed to landlord.

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30th Apr 2019 16:05

Strictly, no.

In practice, HMRC may well overlook it as trivial.

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By A_non
to lionofludesch
30th Apr 2019 16:21

Yes but utility makes quite a substantial amount of VAT as its a manufacturing company.

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to A_non
30th Apr 2019 16:35

A_non wrote:

Yes but utility makes quite a substantial amount of VAT as its a manufacturing company.

OK - don't pay the landlord the VAT element until it's properly billed.

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By DJKL
to lionofludesch
30th Apr 2019 16:52

As landlords we would prefer our tenants discuss the matter with us first rather than start paying part bills which can become a right pain. There are sometimes solutions to these types of issues with constructive dialogue.

e.g. We have one unit where utilities are shared between two tenants where we persuaded one tenant, who was vat registered (we are not), to take the supply in their name and invoice the other tenant- yes it is a pain for the tenant doing the billing but it may be a pain worth their while re the vat recovery that might otherwise not be possible.

Given a lot of business entities will not survive without their premises ,landlords are people it is worthwhile cooperating with ,especially in this day and age of shorter and shorter leases; really annoying tenants tend to be the ones who are not offered renewals and who receive notices of lease termination prior to current lease expiry. (Of course I am biased re this viewpoint)

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to DJKL
30th Apr 2019 17:09

DJKL wrote:

As landlords we would prefer our tenants discuss the matter with us first rather than start paying part bills which can become a right pain. There are sometimes solutions to these types of issues with constructive dialogue.

Well, aye. I was, perhaps incorrectly, assuming some sort of impasse had been reached.

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to lionofludesch
30th Apr 2019 17:13

It will be, Lion, it will . . .

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By DJKL
to lionofludesch
30th Apr 2019 17:22

I find that the catch these days with some of our tenants is that they can reach an impasse with us before opening their mouths to talk- I blame their parents, they have obviously always got their own way and have difficulties when someone points out to them that the world does not revolve around them , in the words of Mick they- can't always get what they want- at which point they seem to try to imitate Violet Elizabeth Bott.

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30th Apr 2019 21:30

Take a look at: https://www.gov.uk/hmrc-internal-manuals/vat-input-tax/vit13300

Essentially the recipient of the supply can claim the VAT. Not that I'd be that comfortable with claiming VAT on invoices addressed to someone else...

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01st May 2019 09:50

Is the landlord VAT registered ??

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01st May 2019 10:09

The lease agreement should make explicit provision for the supply of utilities. Where the utilities are supplied separately to the lease, the landlord should re-invoice the tenant.

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By DJKL
to leshoward
01st May 2019 11:04

But what happens when the landlord is not vat registered nor wishes to register?

Appreciate not my original post, so sorry if this appears a hijack, but would mention my employer, as policy, does not opt to tax our commercial properties, we supply to circa 100 tenants of whom a lot of them are themselves not vat registered (small/micro business entities) and a fair proportion are charities, so vat on rents would be problematic for quite a few of them.

Re the really small we have in quasi business centres we get round utility billing by letting to them on inclusive terms re most utilities, we pay the costs and absorb the vat, re the larger tenants we may rebill on sub meters (my spreadsheets that compute the bills are a joy to behold) but of course cannot charge vat or display a vat number re our rebilling power etc we have been charged, so the vat cost gets included in the average unit price recharged . (we recharge what it costs us)

If you are carving up older buildings into smaller units to let to a variety of tenants (our forte) splitting utilities to distinct power company meters is not high on your list of goals, especially given how much each new connection can cost you, so main billing meters and sub meters can prevail (gas tend to be by sq ft not actual consumption) and these issues do arise.

Another way I have seen things being done is a vat registered managing agent pays all the bills and issues vat invoices to the Landlord's tenants, but I have always been slightly uncomfortable with such an approach. Any thoughts?

It does, however become a consideration; we spend nearly £100k a year (inc vat) on utilities and the trapped vat is probably circa £13k a year, it is nothing like the output vat we would charge to tenants if we did opt to tax our properties but as tenants more and more consider taking occupation not just on rent level considerations but on total occupancy cost considerations, I also would be interested in any collective wisdom from this thread that permitted vat recovery by the tenant.

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