VAT registered or not?
VAT registered or not?
The renovation of our flat is now well underway and were hoping to be complete before end of the year. What we have been doing is spending lots of money on materials which includes a substantial amount of VAT. As I understand it if we are VAT registered we can claim back all VAT on the cost of the renovation and furnishings. Of course this then means we would have to charge VAT on the let at 20% which would either make us uncompetitive of we end up increasing prices a bit and subsidising the remainder. I'm going round in circles trying to work out which is best route. We will have paid something in the region of £6000 in VAT by end of this year......what do you think?
Being VAT registered is a lot of extra work. It effects everything you do not just the holiday let. As you will be making standard rate supplies to consumers and most of your expenses in the future are zero-rated, you will end up paying more to HMRC in total than you can reclaim.
Unless you intend to expand your holiday let business and will exceed the VAT threshold anyway, don't bother.
Unless you intend to expand your holiday let business and will exceed the VAT threshold anyway, don't bother.
+1newtimber wrote:Being VAT registered is a lot of extra work. It effects everything you do not just the holiday let. As you will be making standard rate supplies to consumers and most of your expenses in the future are zero-rated, you will end up paying more to HMRC in total than you can reclaim.
Unless you intend to expand your holiday let business and will exceed the VAT threshold anyway, don't bother.
Gas & Electric VAT is only 5%
Water is exempt
Council Tax/Business Rates are exempt
The full cost of renovation including VAT is a tax deductible expense.
Unless, you bought the property as a business and the purchase price included VAT. In which case 20% of the purchase price is a lot to get back.
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"There is no human problem which could not be solved if people would simply do as I advise"
"As for my amnesia, I've had it as long as I can remember"
Real name: Steve
Gender: Male