VAT - when am I done....

markgl99

I bought an apartment in 2003. At the time the accountant advised I take out a VAT 'loan' in effect - claiming the VAT on the purchase. It's approx. 32542 and ever since I'm repaying that with the VAT on the rent. I reckon I have approx. 5000 left to pay. I have literally just subtracted the VAT from rent, I've not claimed any expense or VAT we paid against that. I've not used the VAT payment against the rental income tax etc..
Is there some formula I should be using to know when I'm done? Should I be factoring in inflation (either way up/down)?
Is there any formal communication I need to make with the revenue to close this down once repaid (unregister?)

Thanks
Mark

barneystinson

markgl99 wrote: »

I bought an apartment in 2003. At the time the accountant advised I take out a VAT 'loan' in effect - claiming the VAT on the purchase. It's approx. 32542 and ever since I'm repaying that with the VAT on the rent. I reckon I have approx. 5000 left to pay. I have literally just subtracted the VAT from rent, I've not claimed any expense or VAT we paid against that. I've not used the VAT payment against the rental income tax etc..
Is there some formula I should be using to know when I'm done? Should I be factoring in inflation (either way up/down)?
Is there any formal communication I need to make with the revenue to close this down once repaid (unregister?)

Thanks
Mark

What do you mean you subtract it from the rent? Do you charge VAT on the rent and file a VAT return with that VAT at T1?

dbran

Hi

I think you should go back and ask your previous accountant as the VAT on property rules changed in 2008.

dbran

markgl99

barneystinson - Originally I filed every 3 months and now I file every 6 months. Out of the 1100 rent I receive I calculate 23% and pay that to the government. Then I have added up all I have paid back and subtract that from my original VAT amount I received on the purchase.
I have had repairs/new items bought for the apartment which I paid VAT on - I have not looked for that VAT back so the only VAT I owe is the original VAT received on the purchase.

dbran - They are no longer in business. Can you give me some further notes on the change in 2008?

Thanks

Howjoe1

Vat on property is very complex.

You basically opted to waive your exemption on a short-term letting to claim vat back of the acquisition cost and thereafter charge vat on the rents @ 23%.

While the vat on property rules changed in 2008,existing waivers, set up under the old rules could remain in place.

So you basiclly have it right, once the "output" VAT you have paid over to Revenue = the input VAt you recovered on acquisition, youcan contact Revenue to deregister from VAT and cease to account for VAT on the rents.

markgl99

Thanks Howjoe1.