VAT Registration

[Stuart Urban]

How many of you Landlords are registered for VAT?

I'm thinking of registering but the downside is if I do then I'm more expensive to anyone thats not VAT registered.

[Tax Accountant]

How many of you Landlords are registered for VAT?

I'm thinking of registering but the downside is if I do then I'm more expensive to anyone thats not VAT registered.

Residential Lettings Rental income is exempt and therefore landlords would not be registered for VAT as far as their lettings business is concerned.

However, if you are already registered for VAT in respect of another VAT Taxable business activity carried on by you, you could be able to reclaim your lettings Exempt VAT Input by including it in your VAT Returns of the registered trade.

Ramnik

[Jonboy]

that dosn't sound strictly legal karongo, or was that your point ;)

[Tax Accountant]

that dosn't sound strictly legal karongo, or was that your point ;)

It is perfectly legal. Check it up on the HMR&C website if you like under exempt supplies and de-minimum limits.

Basically a VAT registered person has only one VAT Registration which covers ALL his business activities, including lettings. Therefore, although a VAT registered trader does not have to account for VAT on lettings income as this is exempt, he'she is still able to reclaim VAT he/she has suffered in the lettings business provided it is within certain limits. At last count, this limit was somewhere in the region of £725 per month which is substantially higher than actual VAT suffered in the lettings business for most people.

If you are registered for VAT in respect of your separate trade, then you will have an accountant with whom you could check this out and also obtain further information. Alternatively speak to the VAT helpline.

Ramnik