TAG Tax

Contact: Richard Higgs; Clarkslegal LLP (Reading, England)

It is well known that there is a blanket exemption from VAT for land and property.  Landlords and landowners will be all too familiar with the requirement to opt to tax land and property, in order to bring income and outgoings related to property within the VAT provisions.

As from 1 October 2012, the VAT exemption for storage facilities was withdrawn on a blanket basis meaning that VAT will automatically be payable on rent even if the option to tax has not been exercised.  The latest VAT information sheet, VAT Information Sheet 10/13 (“IS”) was published on 9 August 2013 and clarified what was intended by the changes which came in on 1 October 2012.  The IS states that the new rules apply to suppliers of “any facility which is used, or could potentially be used, by their customers for the storage of goods and customers who rent facilities to store goods”.

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