Q. My company bought a retail premises 18 months ago and I am VAT registered. I now want to let the flat upstairs to a residential tenant. Do I need to charge her VAT?

A: No, as letting residential accommodation is an exempt supply. However, your business will be partially exempt going forward and so you will need to apportion your input VAT between the taxable and exempt parts, accordingly, only claiming the amounts that relate to your taxable business. This will generally be easy, but there will be a need to apportion VAT in cases where costs relate to both parts, e.g. repairs to the roof etc. You should familiarise yourself with the rules set out in VAT Notice 706 to ensure you are confident with your VAT reporting obligations.
Added By: Sharon Worger on 14th Apr 2021 - 14:23
Number of Views: 76
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