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Do you pay vat on gross earnings?

Do I need to pay VAT on the combined earnings of 2+ holiday let properties if it falls over the VAT threshold?

  • If I own 2+ holiday let properties in the UK and their combined earnings are more than the VAT threshold (currently £73,000) do I need to pay VAT? The properties are not located in the same block, are separated, do not depend on each other and are not connected in any way so will they be classed as separate 'businesses' for the VAT calculation? I know that if one tips the £73,000 mark on its own then I would pay VAT on that one but I'm not sure if I need to add all the incomes from all the properties together. Question 2 does it make a difference if i co-own the properties with someone else? Thanks :o)

  • Answer:

    I would seek professional advice from a qualified accountant who has experience with furnished holiday letting taxation. http://www.taxationweb.co.uk/forum/ is a good resource for furnished holiday letting tax questions and answers.

Stephen at Yahoo! Answers Visit the source

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If you are a sole trader or partnership (ie not a limited company) then you need to register for VAT. If each property is held in its own separate company (with you as shareholder in each one) then neither company would come over the threshold so you would not need to register for VAT.

Dave - landlord unmasked

Normally property rental is exempt from VAT. Landlords may choose to register voluntarily and become subject to VAT, which is useful if they want to reclaim VAT on certain expenditure related to the property.

Jo W

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