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Thread: VAT on Rent Deposit

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    VAT on Rent Deposit

    Just need to clarify whether or not VAT can be charged on a rental Deposit. (both parties are VAT registered)

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    No, it shouldn't be charged or claimed by either party.

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    You may only charge VAT when a transaction is concluded. Receipt of the deposit is not a complete transaction.

    What is interesting though , if the deposit is to cover defaulting rent, then an invoice must be generated with VAT must be created as a normal receipt of rent. Ensure that your deposit includes the vatable amount, or you will be out of pocket for the VAT portion.
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    BusFact (08-Mar-12)

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    Thank you very much.

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