Can yo be charged VAT for an Administration fee?

rebsiem

I've done a bit of hunting online but the findings are inconclusive.

A bit of background...

My ex husband had a shared ownership property with a housing association.  He died last year and our daughter (his only surviving relative) has asked me to sell the property for her.  The housing association asked me to pay an administration fee of £250 + VAT. Is this permitted? 

The fee then becomes £300, and then they have told me I have to pay their legal fees as well, so it's all starting to add up.  I understand that Housing Associations make no profits, but are they allowed to charge VAT on an administration fee.

mybestattempt

VAT is charged on goods and services by VAT registered businesses.


The housing association is providing you with it's administration and legal services and it will be a VAT registered business so they are correctly charging VAT.

Grumpy_chap

rebsiem said:

I've done a bit of hunting online but the findings are inconclusive.

A bit of background...

My ex husband had a shared ownership property with a housing association.  He died last year and our daughter (his only surviving relative) has asked me to sell the property for her.  The housing association asked me to pay an administration fee of £250 + VAT. Is this permitted? 

The fee then becomes £300, and then they have told me I have to pay their legal fees as well, so it's all starting to add up.  I understand that Housing Associations make no profits, but are they allowed to charge VAT on an administration fee.

Yes, VAT is chargeable.

You don't need to pay the costs associated with the sale.  Like all other costs associated with resolving the Estate, the Estate is liable not the Executor personally.

rebsiem

Thank you everyone for your feedback.  I will suck up the fee (the estate has no money until the property is sold and they won't let me sell the property until I pay their damn fee).

Grumpy_chap

rebsiem said:

Thank you everyone for your feedback.  I will suck up the fee (the estate has no money until the property is sold and they won't let me sell the property until I pay their damn fee).

Obviously not good for your cashflow, but you can recover any costs associated with the sale from the proceeds of the sale before distributing the Estate.  Keep records and receipts.

DullGreyGuy

Alderbank said:

For example, domestic rents are VAT exempt, bus and train fares are exempt, also Uni and most other educational fees. Those areas alone are pretty massive for many people.

Trains and buses are not exempt, they are 0% rated, there is significant difference between the two.

For things that are exempt there can be no recovery of the input VAT where as for zero rated goods there are. 

Government has decided some services are fundamental and as such shouldn't be exempt from VAT but that means they cannot recover VAT so it's a double edged sword. Others are considered a necessity and so either have a 0% rate or a reduced rate (we all remember the tampon VAT debacle). All else is automatically standard rate tax.

Human funeral services are exempt, there is no option but to dispose of a body professionally. The downside of that is when they buy their urns etc they are paying VAT which they cannot then recover. Technically it makes it more expensive than it would be if it was 0 rated. 

As to Vets charging VAT, the government haven't said you have to be able to have your pet put down or have to go through a formal burial etc. If you found your pet dead you can just put it under the flowerbed or flush a goldfish, unfortunately you cannot do the same to Gran. 

Were it exempt though the saving wouldnt have been £60 because the base price would have increased to reflect the irrecoverable VAT they are buying on supplies. 

Ultimately its a complaint to your MP as they set the rules of if things are inside the scope of VAT and at what rate.

Alderbank

DullGreyGuy said:

Alderbank said:

For example, domestic rents are VAT exempt, bus and train fares are exempt, also Uni and most other educational fees. Those areas alone are pretty massive for many people.

As to Vets charging VAT, the government haven't said you have to be able to have your pet put down or have to go through a formal burial etc. If you found your pet dead you can just put it under the flowerbed or flush a goldfish, unfortunately you cannot do the same to Gran. 

I agree that stuffing her down the toilet would be a challenge. However you can just put Gran under the flowerbed instead.
Provided you have the death certificate and the green burial form from the registrar it is quite legal.

If you don't own the flowerbed yourself you need the landowner's agreement, but no need for planning permission, or a coffin, or even a hole six feet deep. Just a shovel

Unless you are planning to sell the property later it is a very MSE option. The Government has produced a useful guide: see Human Home Burials
https://www.gov.uk/guidance/cemeteries-and-burials-prevent-groundwater-pollution#human-home-burials

Apologies if this thread is drifting off-topic

DullGreyGuy

Alderbank said:

DullGreyGuy said:

Alderbank said:

For example, domestic rents are VAT exempt, bus and train fares are exempt, also Uni and most other educational fees. Those areas alone are pretty massive for many people.

As to Vets charging VAT, the government haven't said you have to be able to have your pet put down or have to go through a formal burial etc. If you found your pet dead you can just put it under the flowerbed or flush a goldfish, unfortunately you cannot do the same to Gran. 

I agree that stuffing her down the toilet would be a challenge. However you can just put Gran under the flowerbed instead.
Provided you have the death certificate and the green burial form from the registrar it is quite legal.

But there is a process to go through, that said looking at two different councils they give very different advice on what is and isnt required, which is always helpful. No such process has to be followed for normal domestic pets.

I think our former gardener/handyman wished there was as he accidentally dug up our cat that was wrapped in a blanket after about 2-3 years of him being in the ground. Didnt charge us for that days work and was never seen again.