Question 1

VAT Query

Accepted Answer

Q: If within a 12 month period, as a result of collecting extra monies from the leaseholders specifically for the replacement of two large water tanks, our income rises above the £85,000 threshold, will the company become VATable? A: FPRA Hon Consultant Gordon Whelan replies Service charges raised for the upkeep of the common areas of an estate of dwellings, or the common areas of a multi occupied dwelling are exempt from VAT as long as they are required to be paid by the leaseholder under the terms of the lease agreement. Therefore, VAT will not be an issue for you if you raise service charge demands in excess of the VAT threshold. Question submitted February 2018

Question 2

VAT Query

Accepted Answer

Q: If within a 12 month period, as a result of collecting extra monies from the leaseholders specifically for the replacement of two large water tanks, our income rises above the £85,000 threshold, will the company become VATable? A: FPRA Hon Consultant Gordon Whelan replies Service charges raised for the upkeep of the common areas of an estate of dwellings, or the common areas of a multi occupied dwelling are exempt from VAT as long as they are required to be paid by the leaseholder under the terms of the lease agreement. Therefore, VAT will not be an issue for you if you raise service charge demands in excess of the VAT threshold. Question submitted February 2018

VAT Query

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