Are business rent rates VATable?

[Mr Yellow Bean]

Hi everyone,

I would like to take this opportunity to say hello to everyone here. It is my first time starting a business so please do bear in mind I may not have much knowledge in jargons.
There will be times I may ask several times on answers provided until I understand.


My first question is business rent rate VATable?

I am looking to rent a property and it would cost £55,000 p.a.x(I would assume that means per annum approx).
The estimated rate is £27,618.
The property is waiting for HMRC to come back to determine the VAT status of he property.
The property is an existing restaurant which will be kept as a restaurant.

If I understand correctly, if VAT is applicable to the property, does that mean I have to pay VAT on top of the rent AND rate? Or just rent?

The sale price of the property is inviting offers offers over £650,000 exclusive(exclusive meaning if VAT is applicable then I would have to pay that on top of the sale price?).

I can not think of anymore questions related to this area as of now.

I appreciate everyone’s constructive answers and feedback.


Thanks!

 

[Scalloway]

Rents can have VAT added to them if the building owner has opted to tax the building. VAT will also be charged on the sale of a building if the owner has opted to tax. A VAT registered business will be able to reclaim this VAT if it is using the building to make VATable supplies.

There is no VAT on rates.

 

[KAC]

The sale price of the property is inviting offers offers over £650,000 exclusive(exclusive meaning if VAT is applicable then I would have to pay that on top of the sale price?).

On the assumption that the restaurant is being sold as a going concern, it is unlikely that VAT will be chargeable as there is no VAT on TOGC. Have a look here.

Good luck and make sure that your business plan works. This is a big purchase for your first business.

Take advice from an accountant and a lawyer about your plans