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-   -   For all the VAT experts - help please (https://britishexpats.com/forum/usa-57/all-vat-experts-help-please-248376/)

bored-silly Aug 12th 2004 7:39 pm

For all the VAT experts - help please
 
Hi
I live in the USA and still own my house in the UK which I rent out. The rental management company are charging me VAT on the commission I pay at the usual 17.5%. I have been told by an accountant friend that as a 'non-resident landlord,' that I should not be paying VAT of any kind but the management company are adamant that I have to. Has anyone got any expertise in this or advice.
Thanks!
Rachel :D

Boiler Aug 12th 2004 7:58 pm

Re: For all the VAT experts - help please
 

Originally Posted by bored-silly
Hi
I live in the USA and still own my house in the UK which I rent out. The rental management company are charging me VAT on the commission I pay at the usual 17.5%. I have been told by an accountant friend that as a 'non-resident landlord,' that I should not be paying VAT of any kind but the management company are adamant that I have to. Has anyone got any expertise in this or advice.
Thanks!
Rachel :D

Well I am paying VAT, I am no Tax expert and despite having a family full of Accountants, neither are they. Apparently the area most Accountants try and avoid.

Logic says that you pay it, they are providing a VATable service in the UK, like any other service.

My agents are a major set up well used to dealing with overseas landlords.

If you find different, please let me know.

James Box Aug 12th 2004 8:25 pm

Re: For all the VAT experts - help please
 
This may help:

http://www.inlandrevenue.gov.uk/cnr/nr_landlords.htm

Although I realise this is about rent and not commission, there may something mentioned about it or a link.

NC Penguin Aug 12th 2004 8:47 pm

Re: For all the VAT experts - help please
 

Originally Posted by bored-silly
Hi
I live in the USA and still own my house in the UK which I rent out. The rental management company are charging me VAT on the commission I pay at the usual 17.5%. I have been told by an accountant friend that as a 'non-resident landlord,' that I should not be paying VAT of any kind but the management company are adamant that I have to. Has anyone got any expertise in this or advice.
Thanks!
Rachel :D

I'm no expert but have you looked at the Inland Revenue website to see if there's information that will answer your question?

bored-silly Aug 12th 2004 8:50 pm

Re: For all the VAT experts - help please
 

Originally Posted by James Box
This may help:

http://www.inlandrevenue.gov.uk/cnr/nr_landlords.htm

Although I realise this is about rent and not commission, there may something mentioned about it or a link.

I think this is for tax and not VAT (or are they the same??)

James Box Aug 12th 2004 9:04 pm

Re: For all the VAT experts - help please
 

Originally Posted by bored-silly
I think this is for tax and not VAT (or are they the same??)

Well, no. Your tenant pays rent, your agent takes a fee from it (including VAT), then Income Tax is deducted and the rest is given to you.

The grey area that you've found is that if we buy goods from the UK and have them shipped here, we don't need to pay VAT on it. But if its for a service provided in the UK, then I'm not sure (which is your original question). I would guess that you do have to though.

Brit'n'TX Aug 12th 2004 9:14 pm

Re: For all the VAT experts - help please
 

Originally Posted by bored-silly
I think this is for tax and not VAT (or are they the same??)

VAT is collected by the Customs & Excise - nothing to with Inland Revenue at all ...

www.hmce.gov.uk

THFC1 Aug 13th 2004 3:45 pm

Re: For all the VAT experts - help please
 
I'm in the same position and have rented out my apartment in the UK through an agent. I filed a non resident landlord form which means you can collect rent without tax being deducted by your agent. It takes about 30 days for the form to be processed and then they send you a NRLL number which you can then give to your agent. Then you should start getting your full rent money.

I pay a handling fee of 2.5% plus tax to the agent each month and that is the only deduction from the rent.

bored-silly Aug 13th 2004 7:17 pm

Re: For all the VAT experts - help please
 
In the end, I phoned the customs and excise help line who tell me that "as I am enjoying the service that the rental company are supplying in England that I am indeed liable for VAT". Not sure I am 'enjoying' their service - so far they have been crap!
Thanks for all the advice.

Bob Aug 13th 2004 7:35 pm

Re: For all the VAT experts - help please
 
I'm not sure, but I think you'll still have to pay the tax because it is income earned in the UK, so still has to be declared....

check: http://www.inlandrevenue.gov.uk/ for more info....and I think you'll need for fill in P85 to declare your a non resident of UK....something I didn't know about until I got a letter from my student loans *l*

pinKaboo Aug 13th 2004 7:43 pm

Re: For all the VAT experts - help please
 

Originally Posted by bobz
I'm not sure, but I think you'll still have to pay the tax because it is income earned in the UK, so still has to be declared....

check: http://www.inlandrevenue.gov.uk/ for more info....and I think you'll need for fill in P85 to declare your a non resident of UK....something I didn't know about until I got a letter from my student loans *l*


sorry to divert the thread...but student loans! aargh.

I have some too and although I wrote to the Student Loan Company back in February I have yet to hear from them. As I am still unemployed I hope they've agreed to defer my payments and I'm not just running up charges. I was wondering, do you know of any telephone number that you can use to call them from the States? (I can't phone overseas lo-call or freephone numbers from here.)

Also, do you have any suggestions as to how to cope with payments from the States? Seeing as the exchange rate is not favourable going back to the UK, and with added charges for transferring money across I'm rather worried.

thanks! *runs off to investigate this P85 thingy now too!*

pinK

NC Penguin Aug 13th 2004 7:59 pm

Re: For all the VAT experts - help please
 

Originally Posted by pinKaboo
sorry to divert the thread...but student loans! aargh.

I have some too and although I wrote to the Student Loan Company back in February I have yet to hear from them. As I am still unemployed I hope they've agreed to defer my payments and I'm not just running up charges. I was wondering, do you know of any telephone number that you can use to call them from the States? (I can't phone overseas lo-call or freephone numbers from here.)

Also, do you have any suggestions as to how to cope with payments from the States? Seeing as the exchange rate is not favourable going back to the UK, and with added charges for transferring money across I'm rather worried.

<<snip>>

pinK

Have you looked at the Student Loans website? I'm sure there's a regular phone number given there that you can call from the US.

Don't you have even a current account in the UK any more? If not, I'm afraid I don't have suggestions how you're going to make payments.

Perhaps that's something you can email (if they take enquiries that way) the SLC.

Bob Aug 13th 2004 8:01 pm

Re: For all the VAT experts - help please
 

Originally Posted by pinKaboo
sorry to divert the thread...but student loans! aargh.

I have some too and although I wrote to the Student Loan Company back in February I have yet to hear from them. As I am still unemployed I hope they've agreed to defer my payments and I'm not just running up charges. I was wondering, do you know of any telephone number that you can use to call them from the States? (I can't phone overseas lo-call or freephone numbers from here.)

Also, do you have any suggestions as to how to cope with payments from the States? Seeing as the exchange rate is not favourable going back to the UK, and with added charges for transferring money across I'm rather worried.

thanks! *runs off to investigate this P85 thingy now too!*

pinK


They don't have email, last I checked, they also suck, and the phone number isn't free....though what I did was got in contact with my old local LEA with my student number and details and emailed them and they forwarded the info, and was very helpful, you should be able to get your LEA email through your local council website....

and as far as I can gather, I guess you pay at the end of year, you tell them how much you earned, they tell you how much to pay, and it has to be done through a UK bank, so if your not paying to much, I recommend using Paypal to transfter your money from US-UK bank, for me, it's cheaper with smallish amounts, so far....and then do a direct deposit or write them a cheque...

And the SLC, you'll still be racking up the interest, you just don't need to be paying it back until your earnings are above £15,000 now I think....which at this exchange rate will be never *l*

pinKaboo Aug 13th 2004 8:44 pm

Re: For all the VAT experts - help please
 
re: student loans diversion

Cool, thanks for your replies. Yeah, I keep going back and scouring the student loan website for contact infomation, to no avail. They don't do email at all and the only phone number available is an 0800, which I'm blocked from calling. Also, if you call they will only talk to the account holder so my parents couldn't phone from the UK and sort it out either. The Student Loan Company sucks big time. A right pain in the arse.

I hadn't thought to contact my LEA, now that's a plan! And I'm very glad to hear that yearly lump payments could be an option. *phew*

Yeah, I do have a UK account, but it's only really ticking over in order to keep it open. I've found dealing with Bank of America to try to transfer money completely frustrating and fruitless.

Hmmm, I didn't realise I could use Paypal to transfer money like that, I looked into money transfer via that company a while ago and it didn't work out, but maybe US -> UK it's different, or the rules have relaxed? I'll have to go re-investigate, maybe I need to try a US based Paypal account instead of a UK one?!

Thanks for the reply, very helpful indeed. Currently printing out this P85 thing too, thanks also for the link and for pointing that one out!

:D

PrincessofWales Aug 13th 2004 8:50 pm

Re: For all the VAT experts - help please
 
Hi, I'm in a similar situation, I rent a property out to a tenant in the UK, I get charged VAT on my letting agent management fees. This is normal. I also get dinged by the chancellor for any income I make on the property.

Good thing is you can claim back tax liabilities you incur in the UK on your IRS tax return in the US.


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