Is VAT payable on Licences?

Is VAT payable on licence fee?

Is VAT chargeable on rent and licence fees? Commercial property is exempt from VAT but landlords and licensors can exercise the “option to tax”. … If a landlord (or licensor) has waived the VAT exemption, then he must charge VAT on rent and certain other payments made under the lease or licence.

Is licence subject to VAT?

Since the licence which is exempt from VAT is a “licence to occupy land”, it does not matter whether it is characterised as a lease or a licence. Both are exempt and both are equally subject to an election to waive exemption where the law permits.

Is VAT payable on property purchases?

VAT exemption on commercial property

As a general rule, the sale or lease of a commercial property is exempt from VAT, which means neither a purchaser nor a tenant would have to pay VAT. That exemption extends to the exchange of interests in, rights over or licences to occupy commercial properties.

Is there VAT on serviced offices?

Simply put, if the agreement grants right of occupation of an office for an agreed duration in return for payment, and gives the right to exclude others from that office then it is a licence to occupy land. If you meet this criteria you are making an exempt supply and therefore DO NOT charge VAT.

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How long can a licence to occupy last?

What is a Licence to Occupy? A Licence to Occupy (Licence) is a personal agreement between a property owner (Licensor) and an occupier (Licensee). Under a Licence the Licensor provides the Licensee with the non-exclusive possession of a property for a period of time, typically 6 or 12 months.

Do you charge VAT on land rent?

In very general terms, VAT legislation considers the letting of land to be an exempt supply for VAT, which means that no VAT is charged on the rent, but it also means that the farmer will not be able to reclaim any input VAT on any costs incurred to maintain this land.

Is there VAT on television sets?

Buy your cheap TV before VAT increases to 20%! However, one category of goods that will be significantly effected by the new rate of taxation are the non essential luxury goods such as large flat screen TVs.

Are software Licences Vatable?

If you are a business making supplies of digital services to UK consumers, those supplies are liable to UK VAT. If you make supplies of digital services to consumers outside the UK these are not liable to UK VAT. They may be liable to VAT in the country where the consumer is based.

What is the difference between lease and licence?

A lease is a transfer of an interest in a specific immovable property, while licence is a bare permission, without any transfer of an interest. … A lease creates an interest in favour of the leassee with respect of the property, but a licence does not create such an interest.

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What property transactions are exempt from VAT?

The following supplies will be exempt: all leases, assignments, surrenders, reverse surrenders or licences to occupy any interest in land or buildings; sales of freehold commercial property or civil engineering works more than three years old or sales, leases or licences of all residential or charitable property.

Why would you elect a property for VAT?

Electing to charge VAT on property transactions

Suppliers can often elect to charge VAT on commercial property transactions in order to recover any VAT incurred on goods and services that have been supplied to the business previously; this is also known as input tax.

Do you have to pay VAT on office rent?

Commercial property transactions, both leases and purchases, are not exempt from VAT and both tenants and purchasers are obliged to pay VAT on either the rent or the purchase price. It is self-explanatory that a landlord of a commercial property will issue a tax invoice when billing the annual rent.

Does Regus charge VAT?

Generally, if purchases or services are provided in the UK, when the supplier invoices, it is without VAT. They have recently arranged to rent offices in the UK from Regus who has changed VAT.