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Posted Tue, 12 Nov 2024 14:08:46 GMT by UR
I am writing regarding a 10-year lease agreement for a warehouse rental in the UK, for which a company has paid a security deposit. The company has also received a VAT invoice for this deposit and payment has been made accordingly. Could you please advise if the company can reclaim the VAT element on this deposit paid? Or is it only reclaimable when the landlord uses part or all of the deposit to cover unpaid amounts (such as rent or damages) under the lease? Thank you for your assistance with this matter.
Posted Thu, 14 Nov 2024 11:40:09 GMT by HMRC Admin 19 Response
Hi
You should check with the supplier that the VAT has been charged correctly as a security deposit would not normally involve any VAT as there is no supply for a consideration.
If the VAT has been charged incorrectly on the deposit then there would be no input tax to claim. You can see guidance here:
Time of supply (tax point) rules
Thank you.

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