Sole trader selling bikes...is income from residential rent property exempt 85k VAT threshold ?

strandedwonderer

hi guys, can some one help me here,

I have a property that Turns over 17k a year from rental income....

I am a sole trader business selling and servicing Bikes....

are the two Seperate ? say if my turnover from the rental income and the bikes combined hit 85k ? am i safe from vat ?

or is it only if the income from bikes hits 85k I register for Vat ?

for all the moaners out there,,,,,not trying to avoid paying tax here,,, just trying to make sure im legit and on the right course here for if ever my turn over gets to that point...

any help to undertsand this would be highly appreciated thank s in advance

MikeJXE

Rental income from residential property,

in general, is an exempt supply. This is because there is no VAT on rent, and VAT can not be claimed on costs incurred. Therefore most residential landlords do not have to register for VAT. The principal exemption to this is serviced accommodation, i.e. holiday lettings.

mlz1413

2 separate things.
On your tax return you need to say you have business income and property income.
Only your business income is liable for VAT if you break the threshold in a rolling 12 months. 

your income from your business and it's costs need to be declared and you will pay tax on the profit plus pay NIC.

In the property section you declare your income and some associated costs.  You will also pay tax on that.  

If you are unsure on any of this you would be better paying an accountant. Any good accountant will meet with you to discuss your needs and give you a price without charging. 

Bookworm105

as a sole trader the total of your VAT taxable turnover is the total of all your income streams that are not exempt from VAT
- bike selling is standard rate VAT activity
- rental income is an exempt activity 

Calculate your turnover

Taxable turnover is the total value of everything you sell that is not VAT exempt or ‘out of scope’ goods and services.

Register for VAT: When to register for VAT - GOV.UK (www.gov.uk)

Land and property (VAT Notice 742) - GOV.UK (www.gov.uk)

why you think this question is for the housing board rather than the tax board is a moan 

strandedwonderer

hi guys many thanks for your comments.

so ....hypothetically....if my business turnsover lets say £84,999

and my property brings in 17k

i dont have to register fior Vat ?

even though the two seperate things combined totalling £101,999 ?

kind regards

Bookworm105

strandedwonderer said:

hi guys many thanks for your comments.

so ....hypothetically....if my business turnsover lets say £84,999

and my property brings in 17k

i dont have to register fior Vat ?

even though the two seperate things combined totalling £101,999 ?

kind regards

read my reply above.... then you will be able to understand why you did what you did rather than saying "the internet told me it was ok"

strandedwonderer

hi thanks,, but im not wanting to be in the position to "explain why i did what i did" just looking for solid clarity and to be on the right side of everything!

mlz1413

You have been given 3 'solid' answers.
If you don't understand the answers....do yourself a favour and pay an accountant!

MikeJXE

Lol thats straightforward enough 

Grumpy_chap

strandedwonderer said:

hi guys, can some one help me here,

I have a property that Turns over 17k a year from rental income....

I am a sole trader business selling and servicing Bikes....

are the two Seperate ? say if my turnover from the rental income and the bikes combined hit 85k ? am i safe from vat ?

or is it only if the income from bikes hits 85k I register for Vat ?

for all the moaners out there,,,,,not trying to avoid paying tax here,,, just trying to make sure im legit and on the right course here for if ever my turn over gets to that point...

any help to undertsand this would be highly appreciated thank s in advance

strandedwonderer said:

hi thanks,, but im not wanting to be in the position to "explain why i did what i did" just looking for solid clarity and to be on the right side of everything!

You have very clear answers given above, together with the reasoning.

If that remains unclear and you simply want "solid clarity", then rather than relying on strangers on the internet, the solution would be to engage the professional (paid for) services of an Accountant who will be able to give the "solid clarity" backed up by their PI cover should that "solid clarity" turn out to be incorrect.

Given the total income levels you indicate, engaging the professional services of an Accountant may well result in an overall cost saving if the Accountant is able to identify any further opportunity for tax efficiency.

lookbook

I would take the above as general advice and hire a good accountant.