Are you aware that you have to charge VAT for storage space?

14 January 2014

The introduction of VAT on self-storage in October 2012 is still having ramifications! As the legislation referred to self-storage, it was not fully understood what impact it would have on other trade sectors.  Although the legislation was termed self-storage, HMRC defined the granting of facilities to a person, for the storage by them of goods, or a storage facility which is empty, as standard rated – facilities being understood as a unit, container or building.

In August 2013, HMRC issued a VAT information sheet (10/13) (click here to view) which cancels the sheet on self-storage and is now named “Provision of Storage Facilities”.  This notice clarifies that there is no difference between “storage” and the term “self-storage”.  Therefore, if you let space for storage you have to charge VAT!

You must also account for any VAT due under the changes in law that took place with effect from 1 October 2012 whether or not you have charged an amount of VAT to your customer. You may be able to charge the VAT to your customer retrospectively and many contracts make provision for this.

The other implication of VAT on storage is that if you are not VAT registered or have a business which has previously traded under the VAT threshold (presently £79,000), you might find yourself in the situation where you now have to register for VAT.

If you would like VAT-related advice specific to your business, please contact us.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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