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VAT or no VAT

08 November 2011
Issue: 4329 / Categories: Forum & Feedback , VAT
A block of flats is let to a company for a single monthly fee. There is also a car park for which a separate fee is paid

My client owns a block of flats comprising 20 units ten of which have an allocated car parking space. The flats are rented as a whole block for a single payment of £19 000 per month to a serviced apartment company which then rents them out individually to business people and tourists on a short-term basis (often nightly) i.e. similar to a hotel.

The serviced apartment company pays my client a further £1 000 per month for the car parking spaces. The apartment company charges 20% VAT to its customers using the accommodation which is obviously fully furnished in the same way as a hotel.

My client is VAT registered through other activities but has not charged VAT on the £20 000 he receives in relation to this block. Is this correct or should he charge output tax on...

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