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bigduckontax, Accountant
Category: UK Tax
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Julie, I have a limited company providing computer services and have a surplus of ca

Customer Question

Hi Julie,
I have a limited company providing computer services and have a surplus of cash in the company. In the next few years I want to retire so am thinking of buying properties through my company to let out. As my company is VAT registered will I need to charge VAT on the lettings ? Regards Nigel
Submitted: 2 years ago.
Category: UK Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
Your company does not need to charge VAT on the rentals as, in general, transactions in land are exempt from VAT. There is, however, one exception [source Gov UK web site]:
'If you sell the freehold of a new, or partly completed, commercial building your supply is standard-rated unless it qualifies to be treated as part of a transfer of a going concern.'
Your company may elect to so charge, but the problem here is that when it comes to ultimate disposal then VAT will have to be added to the selling price. This may make getting rid of such properties uncompetitive as possible buyers not registered for VAT may well jib as stumping up an additional 20%!
I do hope my reply has been of assistance.