VAT where applicable on rent - Question please???

[ItsTony]

Am I correct in saying, when a commercial property such as an industrial unit is rented out, if the rent is quoted as £10,000 plus vat where applicable, it means that the tenant is liable for VAT on top. However, if the business is VAT registered it can claim this back off the tax man. However if its annual turnover is less than £64,000 and it is not VAT registered then it can't claim back that VAT.

Thanx

[Eric Mc]

Yes.

Although the compulsory turnover threshold for VAT registration is actually £66,000 at the moment.

You can register for VAT voluntarilly even if your turnover hasn't reached the threshold - if you think it might be worthwhile to do so.

Edited by Eric Mc on Wednesday 19th November 12:50

[ItsTony]

Thanx Eric,

[ACEparts_com]

Is there always VAT on commercial properties? I would like to either buy or rent a place in the UK but being based in the channel islands we're unable to claim the vat back (unless we ship the unit over!)

[Piglet]

It depends on whether the landlord has elected to charge VAT, in reality most commercial landlords will do this.

[Eric Mc]

ACEparts_com said:

Is there always VAT on commercial properties? I would like to either buy or rent a place in the UK but being based in the channel islands we're unable to claim the vat back (unless we ship the unit over!)

The default setting for rent is that there is NO VAT charged on it.

However, landlords have the option to "VAT the Specific Property". If they take out this option, then they will charge VAT on the rents.
The Option to VAT is often taken out by landlords when they have high costs involved in building or modifying the property and they wish to recover the VAT on these costs.
Once the Option is Exercised, it stays with that property.

[ACEparts_com]

Soooo, my brother for example who wound down his business and then stared renting it out @ £600+ vat a month for no reason other than that's what his accountant told him is now stuck with charging VAT on the rent and eventual sale of it?

[Eric Mc]

ACEparts_com said:

Soooo, my brother for example who wound down his business and then stared renting it out @ £600+ vat a month for no reason other than that's what his accountant told him is now stuck with charging VAT on the rent and eventual sale of it?

Your sentence is not that clear. You say "your brother wound down his business and started renting IT out". What do you mean by "it" - do you mean the business i.e. he allowed someone else to run his old business under some sort of franchise arrangement or by "it" do you mean that he started renting out the former business premises?