Option To Tax trial period
In Gerald Edelman’s recent edition of, The Property Round, we outlined a trial being carried out by the Option to Tax Unit (OTTU).
Historically, the OTTU have made extensive checks on any notification but this is not necessary for an option to tax to have legal effect. This trial will now become standard procedure. HMRC has simplified the process and will no longer routinely check any OTT notifications and any letter will only acknowledge receipt of the option to tax.
VAT rules around land and property can be especially complex. The effective date of an option to tax can be particularly important for certain property transactions, e.g. Transfer of a Going Concern, and we would strongly advise you to keep copies of any and all correspondence with HMRC, including the completed form 1614A and the auto-acknowledgement e-mail from HMRC to evidence both the effective date of the option and the date that HMRC was notified.
If you require further guidance, speak to our VAT team today.