Commercial Leases · glossary
A landlord's choice, notified to HMRC, to charge VAT on the rent of a building it would otherwise let free of VAT. A landlord that charges VAT can recover the VAT on its own building costs. Fellgate opted so it could recover the VAT on a new roof. Lease 3.4 · Chapter 3 · see VAT on rent
Explained in Chapter 3, Rent, Rent-Free and VAT, of Commercial Leases.
The main page for this term is Option to tax, in Buying Commercial Property.
Letting commercial property is normally exempt from VAT. A landlord can choose to charge it by making the option to tax for a building (Schedule 10 to the VAT Act 1994). Why would it? A landlord that charges VAT can recover the VAT on its own building costs, and one that charges none cannot.Read Chapter 3, Rent, Rent-Free and VAT →
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