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26 March 2019
What is rent for VAT purposes?
A charity client occupies an area of woodland and some buildings owned by one of the trustees. There is an informal licence agreement for the occupation of the land and buildings under which the charity pays £100 a month. This is described as ‘contribution to costs’. The trustee is a farmer and has raised monthly invoices for £100 plus VAT. The charity has asked whether this is correct. The thinking is that if the payment is actually rent perhaps no VAT should be charged.
I know this is a small matter but the charity feels that it has an obligation to save every pound it can. What do readers think?
Query 19 334– Sweet Charity.
Reply by Melanie Lord AVS VAT
The starting point is to resolve what is supplied and how this is used.
Unfortunately the fact that the tenant is a charity is not itself enough to...
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