VAT on chair rent?!

[Calliek]

Can anybody please advise me as i am new to this!

I'm not registered for VAT, but i pay VAT on my chair rent. When completing my tax return can i claim the VAT part of the chair rent as a business expense?

Thank you!

 

[persianista]

Why are you paying vat on your chair rent? rent is not subject to vat.

 

[jes]

FWIW, I have to pay VAT on my rent and it was written into my lease.

I believe it's up to the landlord whether they charge VAT on commercial rent and there's tax benefits (that I don't understand) for and against them to do so.

If you are VAT registered you can re-claim VAT, but if you're not then, unfortunately, you can't

 

[persianista]

I repeat, rent is not subject to vat. Commercial or otherwise.

 

[shedunlop]

When you are not VAT registered you are not able to claim the VAT back, which if you did, you would receive in full. You can, however, put the full amount paid, including the VAT, down as a expense as this is what you paid. If you were VAT registered then you would claim back the VAT and put the nett amount (amount minus the VAT) down on your expenses for income tax purposes.

I was under the impression that VAT would not be chargeable on rent but I would check with the VAT office just to make sure.

Hope this clarifies things a bit for you. :biggrin:

 

[nikkiseed]

its written in my lease to pay vat on my rent and i am not vat registered
suppose it at discretion of landlord

 

[shedunlop]

Your landlord can only charge VAT on rent if the revenue allow them to. There are certain things that have VAT on them and some things are exempt or zero rated. It is not at their discretion really if it is not allowed, this would mean that they are obtaining and extra seventeen and a half percent which they would not have to pay back to the revenue.

Check with the VAT office, they are very friendly and if they say it is not chargeable then confront your landlord.

As I said before I am not sure so please check as one of the other girls, who owns a salon I think seemed very sure! :biggrin:

 

[jes]

A VAT registered landlord can choose to charge VAT on rent or not, it's called 'exercising the option to tax'.

As I mentioned earlier, I'm not exactly sure of the benefits for doing this, but it's something to do with allowing the landlord reclaim VAT on maintenance and repairs for the building.

There's plenty about commercial rent and vat on Google, but here's something I found (towards the bottom of the page) Tax Implications and information

jes

 

[persianista]

This discussion is about a chair rent, not a commercial lease. I rent a chair in one of my salons. I asked the VAT and was told, no vat applies. I double checked with my accountant who does my vat. He confirmed it. She is charging you 17.5% extra rent!

 

[single sparkle]

Here in Ireland you do not pay vat on rent. I'd double check this one before paying your landlord!

 

[Calliek]

thank you everyone! still not much clearer on this but will try speaking to the people you have recommended!

 

[Yurionfire]

As I studied law, VAT = Value Added Tax which apply for goods and services, it shouldn't be charged with rental which related to the real estate law.

Selling, leasing and letting commercial land and buildings are also exempt from VAT.
from HM Revenue & Customs: Introduction to VAT

Talk to the landlord if he misunderrstood and don't worry about the contract, if he intentionally man to charge you VAT that contratct will be dured. this contract is also an unfair contract that hould not be held any liable.


PS. excuse my law English....

 

[tomaska]

Hi Calliek

I was a chartered accountant in a past life and the answer is yes you can claim it back as a business expense.

Dont get too wrapped up with the question of "is VAT applicable on chair rent" - the fact is you your landlord does have the option to charge or not charge VAT on rent & they are charging it.

HtH Tomaska x

 

[shedunlop]

Had an appointment with my accountant this morning and asked for you. She said that as long as they are providing services with the rent of the chair, ie. hot water etc then yes you can be charged VAT on it. There has been a recent test case apparently and she said that was the outcome.