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Posted Tue, 04 Jun 2024 05:54:11 GMT by Sarah Johnson
I run a small business and rent offices from the landlord who occupies part of the building. The utility bills are for the full building and have 5% VAT added to them. The landlord then invoices my business for half the total amount and adds a further 20% VAT. The landlord is VAT registered, my business is not. Is this right?
Posted Wed, 05 Jun 2024 17:25:03 GMT by HMRC Admin 20 Response
Hi Sarah,
Please refer to notice 742 section 11.7.6 regarding supplies of gas/electricity from a landlord to a tenant.
Land and property (VAT Notice 742) 11. Service charges on commercial buildings
Where your portion of the gas/electricity is unmetered then the liability normally follows that of your rent, so if you pay 20% VAT
on rent you would be charged 20% vat on the electricity.
Thank you.

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