Pub sales are often advertised as a “Transfer of a Going Concern” (TOGC) to avoid hefty VAT bills on the purchase price, but there are specific requirements for this benefit (including that both parties are VAT registered and may involve opting to tax the pub) and these will need to be considered.
Is there VAT on pub purchase?
Re: VAT ON PUB DO I HAVE TO PAY? If it’s treated as a transfer of a going concern, VAT isn’t chargeable if you’re VAT registered. Otherwise you’ll have to pay it. Agree with pawncob – if you are going to be operrating the pub as a pub in the interim then you should get it as a TOGC.
Do you pay VAT on purchasing a commercial property?
As a general rule, the sale or lease of a commercial property is exempt from VAT, which means neither a purchaser nor a tenant would have to pay VAT.
Can I reclaim VAT on commercial property purchase?
Reclaiming VAT on a commercial property purchase
As a general rule, the letting or selling of commercial property is generally exempt from VAT, which means you do not have to pay VAT on the purchase price. … In short, if you are charging VAT on your business activity, you can claim VAT on any property costs.
Is VAT charged on commercial rent?
The sale or lease of a commercial property is generally exempt from VAT. If so, the purchaser or tenant does not have to pay VAT. That may be very good overall, however, when a vendor or landlord makes an exempt supply of a property, they are unable to recover VAT incurred on related costs. These can be significant.
How much VAT does a pub pay?
Therefore, ALL alcohol sales remain subject to the regular 20% VAT. But pubs and restaurants will still benefit from the 5% reduction upon sale of any food or soft drinks they sell on the premises, and any hot food or hot drinks sold to takeaway.
How does VAT work in a pub?
You simply pay a flat rate percentage of your gross turnover as VAT. The percentage is less than the standard VAT rate because it takes into account that you cannot reclaim VAT on any of your business purchases. There is a range of flat rate percentages for different types of trade sectors.
How do I avoid paying VAT on commercial property?
If you are buying an opted commercial property, you can avoid paying VAT if you can obtain TOGC status for it by having a tenant in place and being registered for VAT and opting to tax it at the time of the sale.
Why do you have to pay VAT on commercial property?
If you buy a new commercial property that is less than three years old, VAT will be due on the purchase price. VAT will also be due if the seller has “opted to tax” a commercial property, and this happens most frequently when you are buying from a landlord rather than the owner-occupier of an office or factory unit.
Do you have to pay VAT on land purchases?
VAT and property
Types of supply: Dealings in land can be standard rated, zero rated, exempt or even outside the scope of VAT depending on their nature. Exempt supplies – general: Supplies of interests in, rights over or licences to occupy commercial property are in general exempt.
Can you reclaim VAT on commercial vehicles?
If you are buying a commercial vehicle, you can usually reclaim the VAT. For example, a van, lorry or tractor. You can only reclaim the VAT if you use the vehicle in a business.
Can a landlord claim VAT back on repairs?
Buy-to-let landlords cannot usually reclaim VAT on their expenses. Whilst HMRC considers that renting out homes is a business for VAT purposes, it is an exempt one. This can be bad news for landlords because exempt businesses are prevented from reclaiming VAT paid on expenses.
Can you claim back VAT on land purchases?
Opting to tax allows a business to reclaim input VAT and if there are significant upfront standard rated costs the business can reclaim any VAT paid in bringing the land or property to market.
Do landlords charge VAT on rent?
If the landlord has ‘opted to tax’ for VAT purposes, then the rental payments will be subject to VAT; otherwise, rental payments are exempt from VAT. … If your business is VAT-registered, your costs will not normally be any higher whether the landlord has opted to tax or not.
Can a landlord charge VAT on rates?
The landlord of a block of apartments will therefore be exempt from charging VAT. It is common practice in the property rental industry for the landlord to pass on service-related charges such as property rates, electricity, water and refuse to the tenant.
What percentage is VAT?
The standard rate of VAT increased to 20% on 4 January 2011 (from 17.5%). Some things are exempt from VAT , such as postage stamps, financial and property transactions. The VAT rate businesses charge depends on their goods and services.