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