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My client gets charged vat on his rent. he also charges a

Customer Question

My client gets charged vat on his rent.
he also charges a third party rent for a part of the property.
He basically runs a pub, the brewery charge him rent plus vat, which is fine.
but he sub-lets the restaurant part and he therefore charges them rent.
the question being does he add vat to the rent he charges to the people who run the restaurant.
thanks
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. Within the scenario described I think it appropriate to charge VAT on the invoices to the people who run the restaurant. VAT and rents are complex. If one owns a property and charges VAT on rents then when you come to sell the property then you have to add VAT to the selling price which may make you not competitive as a buyer not registered for the tax will have to pay an extra 20%. However, that does not apply here as the premises are merely rented. I do hope I have shown you a way forward in this matter.
Customer: replied 1 year ago.

but for you to charge vat due you not have had to "opt" in.

Expert:  bigduckontax replied 1 year ago.
Yes, your client would have to opt to charge VAT om his invoices to his tenant, but as he himself rents there would be no VAT on disposal which can be the killer if one opts in. I just have a sneaking suspicion that in this case HMRC might jib at his not charging VAT although by the letter of the law he need not.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3116
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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