VAT's in store?
From 1 October 2012, the law was changed to exclude rental of a 'self-storage' unit from VAT exemption. Previously, it could be regarded as a 'licence to occupy land' in some circumstances, and no VAT needed to be charged. Anyone renting out storage units should now be charging output tax, if their total income is over the registration threshold.
HMRC have published an information sheet to help people understand the new rules. Never believe a Chancellor who says he'll make tax simpler! Some of the questions could make your head spin – for example, 'What if I supply a space which could be used for storage, but is being used for a different purpose?'
It's not bedtime reading for everyone, but it's essential reading for anyone letting out space which might be used for storage! If you're not sure about the VAT liability of any income, we'll be happy to advise you.