Does holiday let income count towards turnover threshold for VAT??

BlokkedSinkk

Bit of an obscure question that not many people will know the answer to I fear - but as I'm self-employed, I'm wondering if income I earned from a short-term holiday let will be added to my overall income turnover when it comes to VAT threshold and mandatory registration over £85K?

I was assuming that the two things would be considered as separate, but I just saw that holiday let income is treated more like 'trade' income than rental income for VAT purposes...?

I'm currently just under the turnover threshold for VAT registration and I want to keep it that way as it would just be a pain. My self-employment is in a completely different field from the holiday letting. But are they separate or additive in the eyes of HMRC??

arciere

I thought rent is not 'vatable'?

Olinda99

holiday let income and self empolyed income are taxed under completely different schedules

wages and salaried income are taxed under Schedule “E” and income from a trade or profession carried on by a self-employed person is taxed under Schedule “D” . Income which derives from the ownership of land and property is charged under Schedule “A” .

BlokkedSinkk

Olinda99 said:

holiday let income and self empolyed income are taxed under completely different schedules

wages and salaried income are taxed under Schedule “E” and income from a trade or profession carried on by a self-employed person is taxed under Schedule “D” . Income which derives from the ownership of land and property is charged under Schedule “A” .

Thanks for the info - I'm not quite sure of the implications for this situation though, does this mean that Schedule D and Schedule A incomes (if from a holiday let) both have separate £85K VAT-registration thresholds?

BlokkedSinkk

arciere said:

I thought rent is not 'vatable'?

Furnished holiday let income is apparently, not residential tenancy rent.

SonnyLumiere

I'm afraid Olinda's post is talking about other, non-VAT taxes, so probably best to ignore.

You should go to the HMRC website for detailed guidance (if not using an accountant). 
https://www.gov.uk/hmrc-internal-manuals/vat-registration-manual/vatreg02200 makes it cleat that:
"In all cases it is the person rather than the business which is registered, so a trader must take into account all their business activities"

Olinda99

this may clarify

https://albertgoodman.co.uk/insights/vat-and-furnished-holiday-lets

Sea_Shell

What do you make of today's budget announcement around abolishing tax breaks for Furnished Holiday Lets?

BlokkedSinkk

Sea_Shell said:

What do you make of today's budget announcement around abolishing tax breaks for Furnished Holiday Lets?

I haven't seen it, it is to do with the small business rates thing? If so then I completely agree that loophole should be closed. That doesn't relate to the VAT question though

BlokkedSinkk

Olinda99 said:

this may clarify

https://albertgoodman.co.uk/insights/vat-and-furnished-holiday-lets

Thanks for the link, I did already find this one when I was researching this but I can't see anything in it that specifically relates to my situation - i.e. self-employed and NOT registered for VAT, but could be pushed over the turnover threshold by the FHL if that was included as self-employment turnover. This is where I got the info about FHL being treated more like a 'trade' but I can't find any definitive answer on this on the gov websites.

BlokkedSinkk

SonnyLumiere said:

I'm afraid Olinda's post is talking about other, non-VAT taxes, so probably best to ignore.

You should go to the HMRC website for detailed guidance (if not using an accountant). 
https://www.gov.uk/hmrc-internal-manuals/vat-registration-manual/vatreg02200 makes it cleat that:
"In all cases it is the person rather than the business which is registered, so a trader must take into account all their business activities"

Thanks for this - so it means that if a sole trader has one business A and a second business B, the overall turnover threshold is still £85K for both businesses combined even if they are in completely different sectors? I still wonder if a holiday letting is considered as a 'business activity' though...? It seems to be classified somewhere between rental income and a 'trade' which is why I'm not sure, I can't find any specific guidance about this on HMRC at all.