VAT on sublet of rented premises

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I have a VAT registered business that rents an office premises and they are not charged VAT. They are thinking of subletting one of the offices. Am I correct in thinking that this supply would be exempt unless my client made an option to tax?

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Replies (7)

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chips_at_mattersey
By Les Howard
05th Oct 2017 17:40

Correct.
My rule-of-thumb is: do not Opt to Tax unless you really have to.

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By AllieG
05th Oct 2017 20:46

Thanks for that. I agree with you regarding opting to tax!

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By AllieG
05th Oct 2017 20:46

Thanks for that. I agree with you regarding opting to tax!

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By shaun king
06th Oct 2017 22:06

But if you don't opt to tax you become Partly Exempt and will have to show HMRC that you are fully taxable.

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Replying to shaun king:
By Ruddles
06th Oct 2017 22:12

How does a partially exempt taxpayer show HMRC that they are fully taxable?

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chips_at_mattersey
By Les Howard
09th Oct 2017 08:45

You would need to carry out and retain a De Minimis calculation, even if the result is that the business is fully taxable.
But not too onerous!

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Replying to leshoward:
By Ruddles
09th Oct 2017 09:22

Time for some pedantry. If a business is partially exempt, it is partially exempt. It may be able to recover all input VAT under de minimis (effectively fully taxable) but it is still not fully taxable.

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