VAT on storage - Opting to tax?

[theboytheboy]

We are a vat registered business.

We rent out land for storage - (some containers that we do not own, boats, scaffolding, trailer/horsebox parking, vehicle storage etc.)

We also rent workshops/units (some used just for storage and most used as workshops)

Our accountant has said I must charge vat for all storage. In the case of a unit having both storage and workshop type use I need to make a judgment on which it is more of.

My question is:

Does this mean I need to opt to tax the land and buildings used for storage?
Has anyone any experience?
Can anyone recommend a very good vat specialist?

I will probably need to get a vat specialist but worth checking on here first.

Thanks

 

[MCook]

Safferys produced a good article on this:

Storage facilities and VAT

The application of the VAT exemption to land and property transactions is complicated, HMRC has an ongoing consultation.

www.saffery.com

 

[MrNoo]

We dont charge VAT on our light industrial. Let land for solar and had the option to opt for tax but wasnt worth it, it's not like there are works needing to be done where I could claim vat back. My accountant advised not to bother.

 

[chaffcutter]

Our accountant advised us to take the option to tax on buildings especially if you claimed the VAT on the cost of the building, it can be specific though so you can set the option on a particular area.
Also applies to any land which may be developed in the future or you couldn’t reclaim the VAT on agents, solicitors or consultants fees.

 

[Lazy Sod]

Years ago my now ex landlord opted to tax on the whole farm, except the houses because it was in his interest to do so. I didn't mind as I got the vat back anyway.

 

[Kernowkid]

I’d be interested in people’s thoughts. We have a shed where we’re storing a load of machinery for a Paying neighbour. Would we add vat or not? We’re vat registered and I’m sure our accountant would want us to but after some independent opinions

 

[theboytheboy]

Safferys produced a good article on this:

Storage facilities and VAT

The application of the VAT exemption to land and property transactions is complicated, HMRC has an ongoing consultation.

www.saffery.com

Very helpful. I think this answers most my questions.

 

[theboytheboy]

I’d be interested in people’s thoughts. We have a shed where we’re storing a load of machinery for a Paying neighbour. Would we add vat or not? We’re vat registered and I’m sure our accountant would want us to but after some independent opinions

If I am reading the article correctly I would say if the barn is enclosed and your vat registered you should charge vat

 

[Kernowkid]

If I am reading the article correctly I would say if the barn is enclosed and your vat registered you should charge vat

Yeah that’s what I made of it to. Their vat registered any way so think I’ll just charge vat

 

[MCook]

If I am reading the article correctly I would say if the barn is enclosed and your vat registered you should charge vat

If it is enclosed and they are using it for storage, then VAT should be charged.

I see this misinterpreted a lot, even by accountants and land agents who deal with it on a regular basis.

 

[D14]

We are a vat registered business.

We rent out land for storage - (some containers that we do not own, boats, scaffolding, trailer/horsebox parking, vehicle storage etc.)

We also rent workshops/units (some used just for storage and most used as workshops)

Our accountant has said I must charge vat for all storage. In the case of a unit having both storage and workshop type use I need to make a judgment on which it is more of.

My question is:

Does this mean I need to opt to tax the land and buildings used for storage?
Has anyone any experience?
Can anyone recommend a very good vat specialist?

I will probably need to get a vat specialist but worth checking on here first.

Thanks

Depends on the age of the sheds let out. Anything newish (last 15 years build) we opted to tax, but anything older as in when the farm was first built many years ago, we did not claim the vat back on the materials to convert them to storage so now do not charge vat on the rent. We spoke to a few accountants about this prior to doing anything.

 

[7610 super q]

I store farm machinery for people too.
Old accountant said we must charge VAT, New accountant said not to charge.............

 

[d williams]

We are a vat registered business.

We rent out land for storage - (some containers that we do not own, boats, scaffolding, trailer/horsebox parking, vehicle storage etc.)

We also rent workshops/units (some used just for storage and most used as workshops)

Our accountant has said I must charge vat for all storage. In the case of a unit having both storage and workshop type use I need to make a judgment on which it is more of.

My question is:

Does this mean I need to opt to tax the land and buildings used for storage?
Has anyone any experience?
Can anyone recommend a very good vat specialist?

I will probably need to get a vat specialist but worth checking on here first.

Thanks

Speak to your local vat office and get them to confirm in writing

 

[robs1]

If it's all storage it has vat if a mixed use it can be complicated. Easiest thing is letting to vat registered businesses makes no odds to them then and keeps the vat man happy

 

[AJ123]

If it's all storage it has vat if a mixed use it can be complicated. Easiest thing is letting to vat registered businesses makes no odds to them then and keeps the vat man happy

I’d be interested in people’s thoughts. We have a shed where we’re storing a load of machinery for a Paying neighbour. Would we add vat or not? We’re vat registered and I’m sure our accountant would want us to but after some independent opinions

If the property is opted for vat then yes no mater what the use
If not opted for vat Yes charge at if storage. No vat if workshop or industrial

The risk is if you charge vat when you don’t need to ( the building is not opted for vat, the use is not storage or parking), you can be deemed to have opted for vat. This then means you will have to charge vat to anyone who rents the building in future whether they are registered or not so shrinking your pool of potential tenants or you have to charge less rent so the gross is competitive. And if you ever need to sell, vat on purchase price rules out most lifestyle buyers unless you sell with tenants as a transfer of going concern. That is a whole load more complexity we don’t need here.

So I would caution against charging vat to keep the vat man happy.

You will struggle to find an accountant who can explain it simply. Vat is one of the most complicated taxes there is when you delve into it.

 

[robs1]

If the property is opted for vat then yes no mater what the use
If not opted for vat Yes charge at if storage. No vat if workshop or industrial

The risk is if you charge vat when you don’t need to ( the building is not opted for vat, the use is not storage or parking), you can be deemed to have opted for vat. This then means you will have to charge vat to anyone who rents the building in future whether they are registered or not so shrinking your pool of potential tenants or you have to charge less rent so the gross is competitive. And if you ever need to sell, vat on purchase price rules out most lifestyle buyers unless you sell with tenants as a transfer of going concern. That is a whole load more complexity we don’t need here.

So I would caution against charging vat to keep the vat man happy.

You will struggle to find an accountant who can explain it simply. Vat is one of the most complicated taxes there is when you delve into it.

I dont use an accountant, do it all my self, we have a dozen units but only charge vat on the biggest as it's mainly storage so have no choice and I did claim a fair bit of vat back on its conversion, the tenant trades as a company so claims it back, all but one of the rest are small one man bands

 

[puppet]

Speak to your local vat office and get them to confirm in writing

My accountant advises not to contact any tax authorities unless they write first.
When we did b&b for cattle wintering 20 years ago he advised adding £1/ week +VAT oto cover buildings and power. Even in an old building you will have repairs which will include VAT. As stated just washes through for most tenants.