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| 1 minute read

VAT on property sales - ready for 1 February 2023?

If you want to charge VAT on the sale or letting of a property, generally you have to opt to tax that property, by making the decision to opt to tax, notifying that option to HMRC by completing the requisite HMRC form and sending a covering email to HMRC. That email should include the property address, postcode and date of option in the subject line.

HMRC will no longer send acknowledgement letters for options to tax from 1/2/2023. Instead, taxpayers will receive an automated response email to confirm receipt of their email, so what if a taxpayer has failed to complete the subject line properly? How will they know if their option to tax is valid if HMRC no longer sends an acknowledgement letter?

Unfortunately, HMRC has stated that it will only confirm if a taxpayer has opted to tax if the option was made more than six years ago or the taxpayer is a LPA receiver or insolvency practitioner.

So, if you are notifying your option to tax, make sure that the subject line of your email includes these details, or risk storing up problems for future dealings in the property where you want to charge VAT.

Tags

corporate tax, personal tax, real estate