Do I have to pay VAT on a storage lease?

So if your customer is a storage provider who does not use the facilities for storage themselves but charges other people for using the space for storage, there is no change to the existing VAT liability of your supply. The lease, subject to the normal rules, will be exempt unless you have made an option to tax.

When will VAT be applied to storage facilities?

Therefore, the change introduced by the Finance Act 2012, required the standard rate of VAT to be applied to supplies of storage facilities with effect from 1 October 2012 and it is based on a more general use of the space for storage.

Do storage companies have to pay VAT?

Notice 742A: Opting to Tax Land and Buildings. However, storage suppliers such as traditional removal companies who provide no discrete area and are at liberty to move goods around, have always had to charge VAT on their supplies of storage. 2.2 What are the new rules (from 1 October 2012)?

What is the VAT liability for a single supply of facilities?

Where there is a single supply of facilities which are used by the customer for both the storage of goods and another purpose, the VAT liability follows that of the principal element of the supply in accordance with normal rules.

When is a supply subject to VAT?

However, the supply could be subject to VAT under other rules, for example if the supplier has opted to tax; or if it is taxable under another provision such as facilities for the parking of vehicles. See Notice 742: Land and Property. 2.5 What if the space is used for the storage of goods and another purpose?

Are storage facilities taxable?

So if the principal element of the supply is the provision of storage facilities, then the supply is taxable at the standard rate. Additionally, there is a specific exception where the customer’s use of the structure is ancillary to the main use of the building.