Usually, the grant, assignment or surrender of an interest in land; a right over land, or a license to occupy land is an exempt supply under VATA1994 schedule 9, group 1, unless there is an option to tax in place. However the granting of facilities for parking a vehicle is excluded from the exemption by paragraph 1(h).
HMRC’s land and property manual, VATLP15100, explains further, ‘When considering whether there is a standard rated supply of parking facilities it is important to remember that the facilities must either:
- be designed for the purpose of parking vehicles, or
- provided specifically for the purpose of parking vehicles.’
Your client’s supply to the local council and surrounding businesses will be standard rated. This is also confirmed in vat notice 742 section 4.1.
The letting of the car park at weekends for the markets and car boot sales constitutes a supply of land rather than parking, and therefore an exempt supply, unless an option to tax is exercised. VAT Notice 742, section 4.3, contains examples of supplies which are not deemed to be car parking facilities and includes: ‘Letting of land, including land used at other times as a car park, for purposes such as holding a market or a car boot sale (this also includes the charge to the car owners selling their goods at a car boot sale).’
As it stands at the moment, your client would be making an exempt supply of the land at weekends, as she has not opted to tax the site. By submitting a VAT1614A and opting the land, the charge would then become a standard rated supply. With an option to tax in place the client can make fully taxable supplies and would be able to reclaim all of her input tax on the purchase of the land and any associated costs.
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