Tell HMRC about an option to tax land and buildings

To help businesses during COVID-19 HMRC made a temporary change to the time limit for notifying an option. The change applied to decisions made between 15 February 2020 and 31 July 2021. This temporary change ended on 31 July 2021.

HMRC also allowed options to be signed electronically subject to providing supplementary evidence. This change has now been made permanent.

Check the changes to the time limit and how you notify an option to tax land and buildings (https://www.gov.uk/guidance/changes-to-notifying-an-option-to-tax-land-and-buildings-during-coronavirus-covid-19).

Form VAT1614A has now been updated. You should only complete this form to notify HMRC of your decision to opt to tax land and or buildings.

See:  Tell HMRC about an option to tax land and buildings - GOV.UK (https://www.gov.uk/government/publications/vat-notification-of-an-option-to-tax-land-andor-buildings-vat1614a)

13th August 2021 – Hillmans Weekly Update

Below I have summarised all the main tax related updates we have seen this week.

• The Queen's Awards for Enterprise
• National Insurance for workers from the UK working in the EEA or Switzerland
• Notify Option to Tax Land and Buildings within 30 days of decision
• Personal Pension age to increase to 57 from April 2028

I’m away from the office on annual leave next week with the family, but if you need any support or advice please do not hesitate to contact the team.

I hope you have a great weekend.

Stay safe and well.

Cheers,

Steve

Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100

Notify Option to Tax Land and Buildings within 30 days of decision

Supplies of land and buildings, such as freehold sales, leasing or renting out the property, are normally exempt from VAT. This means that no VAT is payable, but the person making the supply cannot normally recover any of the VAT incurred on property expenses.

However it is possible to waive the exemption, or “opt to tax” the land. For the purposes of VAT, the term ‘land’ includes any buildings or structures permanently affixed to it. You do not need to own the land in order to opt to tax. Once you have opted to tax all the supplies you make of your interest in the land or buildings will normally be standard-rated, and you will normally be able to recover any VAT you incur in making those supplies. See updated HMRC Notice 742a for details: See: Opting to tax land and buildings (VAT Notice 742A) - https://www.gov.uk/guidance/opting-to-tax-land-and-buildings-notice-742a

If you are notifying HMRC of a decision to opt to tax land and buildings, you are normally required to notify HMRC within 30 days by either:

• printing and sending HMRC the notification, signed by an authorised person within the business
• emailing a scanned copy of the signed notification

The 30 day deadline was temporarily extended to 90 days to help businesses and agents during the pandemic. That temporary extension has now ended so for decisions made from 1 August 2021 onwards, you must notify HMRC within 30 days.

See: Changes to notifying an option to tax land and buildings during coronavirus (COVID-19: https://www.gov.uk/guidance/changes-to-notifying-an-option-to-tax-land-and-buildings-during-coronavirus-covid-19

Changes to notifying an option to tax land and buildings during coronavirus

The time limit for notifying HMRC of a decision to opt to tax land and buildings has been temporarily extended to 90 days due to COVID-19.

Normally you are required to notify HMRC within 30 days of deciding to opt to tax land and buildings. This can be done by emailing a scanned copy of the signed notification to opt to tax, or by printing and posting a signed copy of the notification. 

Due to the impact of COVID-19, the rules have been temporarily changed for decisions made between 15th February 2020 and 31st October 2020.

Normally supplies of land and buildings are exempt from VAT. However, you may opt to tax a piece of land or a building so you can recover any VAT incurred in making those supplies. 

This is a complex area of taxation, so please do not hesitate to contact us if you have any queries regarding this. We would be pleased to assist.