Commercial let- new landlord imposing VAT

[jon yates]

THE PROPERTY I HAVE BEEN RENTING FOR FIVE YEARS HAS JUST BEEN PURCHASED BY A PROPERTY DEVELOPER AND ALTHOUGH HE HAS STATED THAT I CAN CONTINUE WITH MY 20 YEAR LEASE HE HAS STARTED TO CHARGE VAT (TAX) ON THE RENT WHICH HAS INCREASED THE RENT TO JUST UNDER £200.00 MORE A MONTH. CAN HE DO THIS WHEN FOR THE LAST FIVE YEARS I WAS PAYING THE PREVIOUS OWNER A RENT WITHOUT VAT?:eek:

[Tax Accountant]

THE PROPERTY I HAVE BEEN RENTING FOR FIVE YEARS HAS JUST BEEN PURCHASED BY A PROPERTY DEVELOPER AND ALTHOUGH HE HAS STATED THAT I CAN CONTINUE WITH MY 20 YEAR LEASE HE HAS STARTED TO CHARGE VAT (TAX) ON THE RENT WHICH HAS INCREASED THE RENT TO JUST UNDER £200.00 MORE A MONTH. CAN HE DO THIS WHEN FOR THE LAST FIVE YEARS I WAS PAYING THE PREVIOUS OWNER A RENT WITHOUT VAT?:eek:

I assume yours is a commercial property.

I also assume that your business is not registered for VAT and therefore unable to reclaim the VAT charged to you.

It seems to me that the landlord has now decided to waive exemption (also known as option to tax) and thereby has started to charge you VAT.

Why has he suddenly decided to do this? Did he spend a lot of money on the property recently whereby he needed to register the property for VAT to enable him to recover the VAT he himself suffered on the expenses?

What does your lease say?

Does the lease have a clause to say that VAT can be charged as and when appropriate?

If the lease allows this, I assume you have no say in the matter.

If necessary, best to check with a solicitor because this is really a legal matter and not a tax matter.

Ramnik