We all know what land is, but the VAT treatment of such supplies can be tricky, says Richard Curtis.
Many small businesses may occupy property that is too large for their own requirements. Unless they are anticipating an expansion in the near future (and given the constraints of the pandemic, Brexit or the crisis in Eastern Europe) letting out that spare space and thereby maximising the assets of a business may make financial sense.
However, while the extra income may be welcome, tax traps may be lurking for the unwary, as illustrated by HMRC's demand for VAT of £18,649 issued under VATA 1994, s 73 in the recent case Errol Willy Salons Ltd v Revenue and Customs ([2022] UKFTT 00017 (TC)).
Background
Errol Willy Salons (EWS) traded as a VAT-registered hair salon and occupied the ground floor and part of the first floor of its premises. Two
