Just need to clarify whether or not VAT can be charged on a rental Deposit. (both parties are VAT registered)
Just need to clarify whether or not VAT can be charged on a rental Deposit. (both parties are VAT registered)
No, it shouldn't be charged or claimed by either party.
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.
Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
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BusFact (08-Mar-12)
Thank you very much.
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