The company rents a large building from a commerical landlord. The landlord's invoices include VAT and this is recovered.
Most of the space (90%) is commerical office space and this is licensed out to commercial licensees. Output VAT is charged on the licenses. A small area is self-contained and residential. The company charges tenants rent for this, but does not charge VAT, believing it to be exempt. On the basis it is indeed exempt, I believe we can nevertheless still recover all input tax relying on the de-minimis rules given in notice 706.
But is it acceptable for the company not to be applying VAT to the rents?
I should add that the rent includes heating and electricity. The company recovers VAT on these bills to and I wonder if this might be a problem.
Thanks for your help!
-- Edited by steve75 on Tuesday 25th of January 2011 02:24:17 PM
