VAT on Letting Land

Letting land and property is normally exempt from VAT unless the landlord of a non-residential building has opted to tax the property, so VAT is charged at 20%. New commercial buildings also carry VAT at 20%.

There are several other exemptions for letting land where VAT should be charged if the business is VAT registered such as hiring a box at a sporting event, pitches at camp sites and hotel accommodation.

Where the hiring of the room or pitch includes other services, be careful to check whether the entire package should be subject to VAT at 20%. For example, when an exhibitor pays for a pitch at an exhibition hall he is usually buying a selection of non-land benefits such as security, advertising and the right to trade. The total package should be subject to VAT even if the letting of the bare land would be exempt.

Wedding venues can also get in a muddle over VAT as letting the room will normally be part of a wedding package including refreshments and other services.

If you are letting land as part of any other deal, discuss the VAT implications with us first.