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bigduckontax
bigduckontax, Accountant
Category: Tax
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I run a co-working space (www.wimbletech.com) - we are

Customer Question

Hi - I run a co-working space (www.wimbletech.com) - we are registered as a CIC - my question, would we need to register and charge our members VAT if VAT registered... members currently get access to a desk space, free wifi, free Tea / Coffee and a couple of monthly free events and an option to pay a little extra and hire lockers and post delivery?
Thanks!
David
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello David, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
You do not need to register or operate VAT until your turnover of standard, reduced or zero rated supplies exceeds or approaches 82K in any one year. Once you do register of course you can reclaim input tax suffered, but if you charge VAT your turnover may suffer if you are providing services to small organisations who are not themselves not subject to the VAT regime.
I do hope that I have been able to assist you with your inquiry.
Customer: replied 2 years ago.

Hi Keith,

Thank you for your answer, not quite what I was asking however...I already know the £82k threshold.. and turnover implications.... what I am need to understand is whether, specifically, the 'rental of desks' rental (with other elements provided as part of the rental) is VAT chargeable or not... a colleague mentioned that 'desk rental', in a co-working situation, may be exempt... HOWEVER the other 'bits' included in the cost may mean that I DO have to charge my 'members' VAT - are you able to confirm whether I do or do not need to charge my members VAT?

Best,

David

Expert:  bigduckontax replied 2 years ago.
According to Leeds Beckett University desk rental and co-working is a standard rated supply. Coworking Space Ltd say the same, ditto Co.WorkingLONDON.com.
There seems little doubt that the services you provide are standard rated supplies ao it the turnover level is breached than you should be charging and accounting for VAT in your sales, David.
Customer: replied 2 years ago.

Thanks Keith - I can see that a few others do charge... there are also others who do not charge (key here would be to know whether those that don't charge have turnover over threshold = they have decided that their 'provision' of desk space is VAT exempt... really tricky one this... the following seem to have the answer in there however looks like on the margins - have a look - what do you think?:

http://www.accountingweb.co.uk/anyanswers/question/vat-subletting-part-let-premises

https://www.gov.uk/government/publications/vat-notice-742-land-and-property/vat-notice-742-land-and-property

Best,

David

Expert:  bigduckontax replied 2 years ago.
I am of the opinion David that this form of trading constitutes standard rated supplies. It can be clearly distinguished from normal property leasing or letting by the short term nature of the supplies.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.