Vat on service charge/utilities

[bren1916]

Hi,

We have always leased a property in it's entirety to a tenant who paid 100% of the associated bills.
Due to them downsizing, we are now about to let the available space to another company in the same property.

My question relates to recharging of utility bills and associated Vat.
Our company is not liable for Vat and therefore cannot reclaim vat on utility bills leading to a situation where we need to pass on the total bill (including vat) to the tenants. There will be no Vat charged here so they cannot reclaim their portion of Vat. Both leases are under 10 years and therefore exempt in the eyes of Revenue.

Has anyone come across this situation before or think of a fair way around it?

Thanks in advance,


Brendan.

 

[Joe_90]

You need to talk to your accountant.

You have exempt lettings, without knowing the specific history of the building can't comment. Comments like its less than 10 years therefore exempt in the eyes of the Revenue are true but there was a waiver available under the old rules and an option to tax under the new rules.

If you don't have a VAT number then the VAT can't be recharged. Have you considered getting a separate meter and get them billed directly.

 

[bren1916]

Thx Joe, thought about separate metering but we'd still have Vat issue surrounding bills for alarm maintenance,office cleaning and all other the usual charges.

Our accounts dept came back with the view that we need to pass the charge onto tenants to take the hit on Vat but obvioulsy I'd rather avoid that..