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VAT and Residential Property Letting - can it be offset?

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Hi All


My first post on Property Hub. I have been investing in property for about a year now and have a few properties that are not within easy travelling distance, hence they are all managed by letting agents.


Rob and Rob's company YellowLettings manages one of these. (On a side note I have been very impressed so far with the service, especially considering the low fees. I will be using them more in future).


I received my rent from Yellow Lettings today and noticed that they had not added VAT to their fee. I beleive this will be a short lived as it will soon not be economical for them to do this as revenues increase.


The other letting agent I use does charge VAT... along with any tradesmen who do maintenance. This VAT soon adds up and takes a large chunk out of your income.


Usually a business would offset any VAT they pay against any VAT they charge on their product or service. But unfortunately as you can't charge VAT on residental rent I don't have any ability to do that.


Does anyone know a way to legally optimise their VAT tax structure?





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Hi Matt,


I believe the solution to this is to become VAT registered.

This allows you to put in a VAT return every 3 months and claim the VAT back.

You'll also need to register as self-employed with HMRC if you have not done so already.


Have a read here on hmrc's site:  http://www.hmrc.gov.uk/migrantworkers/self-employed.htm

The important bit:

       You can also choose to register for VAT even if your self-employment income is low.

       If you register for VAT you can also get back any VAT you pay on goods or services you buy for your business.


Check out my property journey here:  http://diytopropertyinvestor.co.uk/

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