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Sam
Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I have a client who operates a co-working space with three

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Hi, I have a client who operates a co-working space with three commercial properties. They provide amongst other things desk hire, office hire, and registered office address facilities. The business is vat registered and they have clients that are resident in the Republic of Ireland who use the services.
Assistant: Have you talked to a tax professional about this?
Customer: I have been providing basic bookkeeping and accountancy services, but they are reluctant to seek a formal opinion on the tax treatment. At the minute there is an option to tax on one property but not the other two. The question is that, with the property that does not have the option to tax we have treated the office hire as exempt - in the absence of the option to tax, and all other services have been standard rated. The ROI clients are disputing this treatment stating that under the EC supply of services that they shouldn't e charged vat, but as the place of supply is in the UK, then we believe that this is not the case, and we are correct in charging vat. The southern customers are saying they cannot reclaim the vat being charged.
Assistant: Anything else you want the Accountant to know before I connect you?
Customer: No, that's it thanks

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Customer: replied 6 days ago.
Thanks

Hi

Its quite right that the option to tax property should charge VAT on the rental income and that yes in all cases the place of supply is in the UK, were it goods then fine but this is not - you are correct in your thought process and they ca claim the full gross amount charged against their profits so they do not lose out either

Thanks

Sam

Sam and other Tax Specialists are ready to help you
Customer: replied 6 days ago.
Thanks Sam, I'll revert to the client to confirm that we are correctly treating these transactions. In the event that they decide they want a formal opinion on this, is this a service you can provide?
Customer: replied 6 days ago.
Also, on the basis that the ROI client has a desk hire facility can they also register for vat in the UK and reclaim the vat that way?, I'm assuming they are generating sales revenue here as well so presumably they would have to charge vat on to their customers if they did register.
Customer: replied 6 days ago.
Sorry Sam, one other quick question - where the service is for "desk hire unlimited" - ie. the customer has unlimited access to a desk in the co-working space, is there any way we could argue that as it is unlimited, and the business is essentially guaranteeing a space - if we were to say that it is a fixed desk/place in the building - although not separated into a separate office space that this could be deemed to fall within the provision of office hire and therefore could be exempted?. Although this may cause the business issues in relation to the partial exemption and reclaim of input vat.

Hi

Thanks for your response I can only advsie the basic VAT rules and that is that with option to tax rental space is subjected to VAT and this client rents Uk space in a building opted to tax so UK VAT is due.

I cannot comment on their VAT position or whether they should or should not charge VAT on any UK clients as this is their business position not within the remit of yours.

We cannot offer one to one formal services as although some of us have accountancy jobs (and I have my own business) through our affiliation with Just Answer we agree to assist at arms length (through just Answer) and cannot offer advsie or representation directly - I am sorry

But as to your last question VAT is due whether unlimited or shared or fixed

Thanks

Sam

Customer: replied 6 days ago.
Hi Sam, thanks for that.

Hi

You are welcome

Thanks

Sam