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VAT Registered - Am I Misunderstanding? Help!

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Hello all,


I'm hopefully after some advice, expertise and experience around VAT registration for LTD Company.


The way I understand it at present is:

Rental is VAT exempt - so if we was VAT registered and our rent was say £500 pcm for a property we'd charge £500 with 0 VAT. We wouldn't need to charge £500 + VAT.

IF we was VAT registered we would be able to claim the VAT back on all expenditure such as boilers, kitchens, bathrooms and tradesmen where applicable.

Additional accounting expenses due to having to submit VAT returns.


My concern is, if my understanding is right then why isn't everyone VAT registered who's operating in this area? So I would question why would you not go VAT registered if the above is correct?


Am I misunderstanding or missing something?


Thanks in advance as always,



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I would say for sure that you are misunderstanding how VAT works - though am no expert. Firstly you are not selling any good or services in BTL so doubt you can just go and register for VAT - as you will never actually charge anyone any VAT. The 'claiming back' VAT really only works on newbuilds as far as i know. I am sure someone with more knowledge will correct me but am 99,9% sure what your saying is not possible.

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I assume you are talking about a property investment company? Residential property is exempt supply for VAT so you can't charge VAT on rent but also can't recover VAT for expenses like the ones you mentioned. You wouldn't be able to register for VAT.

It is a different conversation to be had if you are running serviced accommodation, invest in commercial property or sell new build property.

David M Slater ACMA 

Accufy Accounting  - Proactive accounting for property investors 

0208 242 4926    info@accufy.uk



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