VQOTW: Temporary amendment to Option to Tax notification procedure

My practice mainly deals with smaller owner-managed businesses and I rarely have to grapple with the intricacies of VAT land and property matters. However, a long-standing client decided to purchase a commercial property to rent to his trading company, using his SIPP as the vehicle for ownership. The property in question was purchased on 25th February 2020 for 180,000 plus VAT, but the client didn’t inform me until earlier this month in May. I immediately applied to VAT register the SIPP and sent off the option to tax notification at the same time, both requesting the 25th February as the effective date. Subsequent advice led me to assume I had missed the 30 day deadline, but to my surprise it has all been accepted from that date. Please could you shed any light on this.

On 14th May, HMRC published a temporary extension to the notification period for notifying an Option to Tax (OTT). Full details can be found here https://www.gov.uk/guidance/changes-to-notifying-an-option-to-tax-land-and-buildings-during-coronavirus-covid-19?utm_source=7c18ac26-0f0e-4f59-a824-1cbd025f9cb7&utm_medium=email&utm_campaign=govuk-notifications&utm_content=daily. You are correct in your understanding that the usual procedure is for an OTT to be notified to HMRC within 30 days of the decision being taken, with the notification being made by post with a signed VAT1614a form or an email with a signed scanned copy of the form attached. But HMRC have announced that as “social distancing in response to coronavirus has made these rules challenging to follow. We have temporarily changed the rules to help businesses and agents.”

In summary the time limit for notification has been temporarily extended to 90 days from the date the decision to opt was made. This applies to decisions made between 15 February and 30 June 2020. Notifications can be emailed to optiontotaxnationalunit@hmrc.gov.uk and an electronic signature is acceptable. The guidance provides further information on additional requirements to prove the signatory is an authorised person or agent.

As such, it appears that HMRC are attempting to retrospectively tackle the issue, probably compounded by their own practical challenges of processing postal applications, and therefore it is likely that your client’s OTT was processed under this temporary extension, despite HMRC not making a formal announcement until later in the month.


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Sally is the Team Leader of the VAT Advice and Consultancy team at Croner Taxwise. She has worked in VAT since 1990, including eight years spent with HMRC, both as an Assurance and Enquiries Officer involved in presenting seminars and business education. Since joining private practice in 1999, Sally has specialised in providing VAT technical advice to a variety of clients, ranging from small one-man bands to large multi-national corporations, on the full range of VAT technical matters.

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