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bigduckontax
bigduckontax, Accountant
Category: Tax
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Our rugby club agree to a licence pitches after being

Customer Question

Our rugby club agree to a licence for 2 pitches after being tenents for 135 years , we were offered a sum to compensate us for improvements ie 30 year floodlights ,drainage and pitch improvements railings ,posts .hard standing for cars etc .
Improvements agreed by landlord
Is the sum agreed subject to vat?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. It all depends upon the landlord's VAT status. The land transaction [ie the licence] would normally be exempt from VAT, but some landlords do charge it on land transactions as they can opt so to do. As for the other improvements they are indeed standard rated supplies and the landlord entitled to, and indeed must, if registered, charge the tax on the settlement invoice. 135 years eh; don't you wish some philanthropic Victorian hadn't bought the pitches for the club years ago! I recognise your predicament for your club is probably not VAT registered so cannot claim back the input tax. I was the Treasurer of a club once where extensive refurbishment of the premises was needed so we registered for VAT, claimed all the input tax back, but, of course, had to charge VAT on our subscriptions and bar sales etc and after two years de-registered. I am so sorry to have to rain on your parade.
Customer: replied 1 year ago.
Kieth
Your right I am disappointed , after all my google research I was confidant that property compensation payments to tenants were outside the scope of vat , your answer was very quick please research deeper into this as buying or compensating for a 500 seat stand ie a building,or railings concreted into the ground are perminent stuctures and are outside the scope of vat ??
Expert:  bigduckontax replied 1 year ago.
I am so sorry, but this is a fact of VAT. About the only building activities not liable to VAT involve residential accommodation or requirements for disabled people.
The property compensation itself may be exempt or even outside the scope of VAT, but any building works most certainly are not.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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