Alan Pink looks at some disastrous VAT errors that frequently occur in practice in the sphere of property and how to avoid them.
Of all the VAT mistakes you can make, the ones relating to property transactions are likely to be the most expensive because, in the nature of things, property transactions tend to involve large sums of money. And it’s surprising how, even in this day and age, the conduct of VAT matters is often relegated to a low level in a business organisation.
VAT on rent
The question of whether rent (either receivable or payable by an organisation) should have VAT on it is a case in point. The bookkeeper who raises the invoice for the landlord, or the bookkeeper who processes the payment of rent for the tenant, may well have no more than a hazy idea of how the rules work.
The basic rule,
