VAT on Retirement Village Service Charge

VAT on Retirement Village Service Charge

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Hi, 

We are looking for some clarifacation over the VAT on a service charge in a Retirement Village. 

Each resident owns their apartment but is required to pay a weekly service charge (payable on a monthly basis) to the management company of the village. The management company is VAT registered. 

The management company has been brought in by the owners of the village to run and manage the village. The service charge is payable to the management company. 

Any thoughts on the VAT element (if there is VAT to be charged on this) of this service charge would be great please. 

 

Thank you 

 

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chips_at_mattersey
By Les Howard
29th Jul 2016 12:54

Strictly, a service charge is taxable unless part of a lease. But, residential service charges can be exempt by concession even to freehold occupants. You will need to check the guidance in Notice 742.

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