Lennartz
In the 2007 Budget, three measures were announced concerning the VAT treatment of assets to be used partly for non-business purposes, see Budget Note 56 on www.hmrc.gov.uk. The note confirms that the 'Lennartz accounting' regulations, which were due to come into force on 1 September 2007, will now come into force on 1 November.
Lennartz
In the 2007 Budget, three measures were announced concerning the VAT treatment of assets to be used partly for non-business purposes, see Budget Note 56 on www.hmrc.gov.uk. The note confirms that the 'Lennartz accounting' regulations, which were due to come into force on 1 September 2007, will now come into force on 1 November.
Lennartz accounting is where a business allocates an asset wholly to business purposes, recovers all the VAT charged up front (subject to the normal partial exemption rules) and accounts for VAT on the non-business use in each VAT return period. The new regulations will specify the economic life of a Lennartz asset, that being the period over which private use should be accounted; and set out how taxpayers must account for any private or non-business use.
The implementation of these regulations has been delayed until 1 November to allow HMRC to take account of comments received about the draft regulations. It should be noted that any resulting changes to the regulations will not alter the basic position that, in future, the economic life of land and buildings will be ten years.
Revenue and Customs Brief 56/07, 13 august 2007
