Please help, VAT

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in AAT member discussion
Hi Everybody, Could you please help me on VAT regarding a property investment business. Could VAT be charged on rented hostel accomodation? Or if anybody knows what VAT notice to read? Your help will be much appreciated.

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Please help, VAT

    You will need to elaborate on your circumstances a little more in order to get a considered response but..

    If by hostel, you mean a student/traveller type cheap hotel accommodation then yes, the establishment is likely to be a VAT registered business and charge VAT on the rooms just as any other VAT registered hotelier.

    If you mean the type of hostel that is tenanted/leased residential accommodation then it may or may not have VAT charged depending on the status of the property itself.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Please help, VAT

    Thanks dean.

    This business let properties for another body that uses it as hostels. Being a property investment business, I thought that it is exempted from VAT but our client has already registered for it. When I went through some VAT notices e.g. Noitice709/3,742 and 706etc, it states that all input VAT cannot be claimed by partly exempted business except in an option to tax situation. The sales invoices from our client do not contain VAT. How do I deal with this? Do our client have to re-issue VAT invoices for their customers or can input VAT only be claimed(is this possible though)? I am tired of reading the notices and I'm running out of time.

    Point to note, our client just registered for VAT with months. The hostel is used for emergency accomodation. Hope I'm crystal clear about my dillema. Thanks again for your help. I'm going to have my delayed lunch now.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Please help, VAT

    Hi Sindy

    Assuming your client does not currently own any properties that have an option to tax on them then they should not have registered for VAT in the first place. All their supplies will be exempt and registration was therefore not an option. If this is the case then HMRC can be notified and the registration will be cancelled. No input VAT can be reclaimed in any case.

    If your client does have tax opted properties then they are correct in registering as otherwise the VAT paid on acquisition would be irrecoverable. You will then have to apply the partial exemption rules for reclaiming input VAT.

    If I were you I would give the AAT/Croner Consulting helpline a quick call to clarify.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Please help, VAT

    Thanks again Dean. You've been very helpful. Could you please give me the contact detail of who you suggested AAT/Croner Consulting.


    Your're a big help. Have a nice day.



    Sindy.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Please help, VAT

    Croner Consulting helpline number is 08707 45 45 45 you need to give the AAT scheme number which is AAT37361 and provide your AAT membership number.

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Please help, VAT


    Hi Dean,
    I really appreciate your help and time. I owe you one.

    Have an enjoyable weekend.


    Sindy

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