A client is a VAT registered Ltd Co who rents an office. The building is VATable and so he pays VAT on his rent. He would like to rent out 'desk space' in the office to another business. It will literally just be a desk but with use of shared kitchen, toilet, photocopier facilities etc. Should he charge VAT on the desk space rental? I'm going round in circles trying to find the answer to this online - doesn't appear very clear cut!
Regardless of the VATable state of the business that he rents office space from - is your client himself VAT registered? That is the determining factor in how he bills. You have said that he is, so yes - all invoices he sends out must have the correctly calculated VAT on them.
Then come the harder questions - do the terms of his lease allow for sub-letting? Does he have the correct insurance? (I would assume some form of landlords insurance would be needed, and probably some sort of public liability as there may be an unknown number of clients visiting over the course of time). Has he got or can he get the correct 'elf and safety documentation - if the lease allows for sub-letting, is the sub-let covered under the main contract he holds (I doubt it!).
Can 'o worms time!
-- Edited by Unwize Owl on Friday 6th of February 2015 07:04:20 AM
Thank you - that was the conclusion I was coming to but it's nice to have it confirmed. That's the part of working alone I dislike most - no one to talk things over with!!
As to your other points you're right - can of worms!! I'll go back to him and check he's considered all of the implications - I suspect I know the answer!
You didn't think this was going to be an easy job did you? :) And there is always someone here who can help.
Ahh well, probably best that you make aware of all the things he never thought about.... then you can sit him down and sort out all the costs and 'help' him set a price for the desk.
Won't that be fun.
