To Opt or Not to Opt, that is the Question - DAC Beachcroft

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To Opt or Not to Opt, that is the Question

Published On: 13 November 2014

It will be to your advantage to opt to charge VAT over a particular property if you have incurred or will incur significant amounts of VAT on any of the following:

  1. Work done on the property in the past;
  2. Work to be done on the property in the future; and/or
  3. The purchase of the property itself.

If you haven't incurred or are not about to incur any of the above costs then you may not need to opt to tax. This will make the property attractive to a wider scope of businesses including those in the financial sector where normally they prefer not to pay VAT on rent.

In general, for commercial premises the balance normally tilts in favour of opting to charge VAT but this is not universal. There are anti-avoidance rules but in the overwhelming majority of commercial circumstances, they don't apply

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