In September 2018, H M Revenue & Customs (“HMRC”) issued Revenue & Customs Brief 6 – VAT Exemption for all domestic service charges, VAT Information Sheet 07/18 – Applying the correct VAT liability on residential domestic service charges, and an amendment to Section 12 Service charges and residential accommodation of HMRC Notice 742 Land and Property.
Synopsis
The purpose of these publications was to provide clarification as to the VAT treatment of residential service charges as it had become clear that in a number of cases VAT was not being accounted for correctly. While the clarification provided has helped to resolve a number of problems, particularly in the case of third party managing agents, it has given rise to a number of issues and questions for Resident Management Companies (“RMC”) and Right to Manage (“RTM”) companies. The purpose of this Guidance Note is to try and provide further assistance to RMCs and RTMs.
This Guidance Note has been seen and commented on by HMRC.
Covering Topics
- Overview
- Basic VAT principles
- Resident Management Companies
- VAT implications for RMCs not VAT registered and not
holding a freehold or superior interest
- Right to Manage Companies
- Service Charge Recoverable Staff Costs
- What will the cost be?
- Further information
