Changing VAT on Storage units

grumpymaddie

I have to keep most of my possessions in a storage unit as I've had to have a dramatic downsize in accomodation.
I received an answerphone message to say that as the VAT status of storage facilities has changed I now owe them money.

I paid for 6 months storage at the 0% rate, that was correct at the time, expecting not to make any more payments until January.

Any idea where the law stands on this one?

The storage unit is insisting that the government is asking them to make everyone pay, but it sounds ridiculous to be asked to now pay tax on a service I paid for 4 months ago!

I don't know how to check up on them as the HMRC website is so confusing!

HELP!

System

Unless your invoice is dated before the announcement in March then it falls foul of the anti-forestalling measures. This means that you will have to pay VAT for your storage from the 1st October.

JasonLVC

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_PublicNoticesAndInfoSheets&propertyType=document&columns=1&id=HMCE_PROD1_032286

Quoted :-


There are also specific anti-forestalling provisions which will apply in relation to this change of VAT liability. They provide that supplies of self storage for periods straddling 1 October 2012 will be apportioned so that supplies before 1 October 2012 are covered by the current rules, and supplies on or after 1 October 2012 are covered by the new rules.

The anti-forestalling rules are designed to prevent suppliers avoiding the effect of the 1 October 2012 changes by bringing forward the time of supply. They ensure that all supplies of self storage or approved alterations to listed buildings provided on or after 1 October 2012 are subject to VAT at 20%, whenever they are paid for, unless in the case of listed buildings they qualify for transitional relief (see paragraph 3.2 below). The Finance Act 2012 achieves this by introducing [FONT=Arial,Arial][FONT=Arial,Arial]an anti-forestalling charge to VAT [/FONT][/FONT]at a rate equal to the standard rate of VAT. This charge is due on 1 October 2012.

Renting a storage unit is a continuous supply of services, so although you may have paid up front for it, you are consuming the service continuosly, although you've paid in advance you are still paying for a "per day" rate.