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08 August 2017
Issue: 4611 / Categories: Forum & Feedback

VAT liability of short-term rental income in main residence.

I act for a sole trader computer consultant who deliberately keeps his annual turnover below the VAT threshold. However he told me last week that he has a nice source of extra income renting out the spare bedroom in his flat to professional actors and actresses involved in local theatrical productions. His property is advertised on a website intended for this purpose namely linking landlords and tenants. The average stay could be between one week and one month depending on the length of the show in the city.

My first thought was that this income would be exempt from VAT because it is rental income. But then a colleague said that because the accommodation is short term and my client provides food as part of the arrangement (only breakfast) the income would be subject to VAT and is included in the registration threshold.

It seems strange...

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