[plastics77]

Thanks very much Trevor, that is useful. The questions are pretty much sequential and clearly signpost if you need to miss the question and move onto somewhere else – I couldn’t find the form anywhere online either, so have scanned and attached to this message. I think I might need to complete q3 but just leave that part of the question blank or n/a. I am sure they will query this if I have done it incorrectly and then I can try and explain it, or just send this back with a covering letter…

[plastics77]

Ok so I finally de-registered in December, as there were still invoices being raised in the last 2 quarters, so effective date for ceasing trading was the last invoice for which income was received and for which VAT was paid. I de-registered online, however, I have received a form saying ‘our records show that you own, or have owned land or property that involve an Option to Tax’ – it then asks me to complete a ‘VAT Deregistration Option to Tax’ form which involves providing details of the property, date of purchase, date of sale, VAT reg of new owner etc.
There is something a little confusing:
There is Q4 which is straightforward ‘did you transfer the property as a going concern’ and asks for details of the new owner, date of transfer, value of property transaction
But the preceding Q3, asks ‘has the property been sold’ – state the price it sold for excl VAT, date of sale and then asks ‘on which VAT return did you declare the tax due – please enter the VAT period’  – but I didn’t declare any tax due, because I sold it as  TOGC in July, which is reflected by my answers in q4. Was I meant to have declared the theoretical VAT due in the July return and declared the property transaction value in that return? If so, I haven’t, what can I do about that now??
Thanks

[plastics77]

Thanks  makes sense! Contractually it was agreed any income related to time before completion date would be mine and any after that would be the new owner’s. Agree, can’t keep VAT registered in the unlikely event this happens again!

I think I am clear on next steps now, many thanks for your help Trevor…

[plastics77]

Thanks Trevor ! Yes the professional fees invoice is dated from July and the new owner has his own VAT registration number

Re. providing figures upto the point of sale – we asked that – the management company simply said ‘the submission would be for the full quarter as despite the sale of your unit, this doesn’t tie in with your return dates’
Ordinarily this wouldn’t have been issue this year, as all the returns were nil returns – and certainly to the point of sale in July it would have been a nil return – however, the fly in the ointment is the exceptional payment in August of income retained from a previous quarter of 2020 – so now the return to point of sale (2nd July) would still be a nil return, however the remainder of the two months, Jul/Aug for the Jun-Aug return, now has an income and VAT payment for boxes 1,3 and 6!
I agree, the process looks easiest to now complete the Jun-Aug return for my VAT registration, including the professional fee VAT reclaim in boxes 4 and 7, effectively like my final return, then deregister and send a note to HMRC explaining the situation.
Only conundrum is that after I deregister, and no longer exist, if the management company do decide to pay back retained income from other previous quarters of the Covid years, in the future then I can’t be paid – presumably once I am de-registered as a VAT business they cannot pay me or the VAT on my behalf…

[plastics77]

Thanks Trevor, agree, something happens to website where you end up on an older archive section sometimes. Anyway, thank you for the reply.
So I can’t submit the end-Aug return yet as I am still awaiting the management company to provide the VAT figures (usually would be nil return during the pandemic, but as they’ve finally given us some money this quarter, will need to get the figures confirmed for this one) which they normally provide us to submit to HMRC – they then pay the VAT owed on our behalf.
I already have the professional fees invoice at the time of the sale in July (agent and legal fees). 

Few more queries, most grateful if you can clarify, as I am still confused (hopefully never getting involved with VAT again!
– when you say contact HMRC and notify them that taxable activity has ceased – do I just email/write to them, and assume they get it, as clearly I can’t wait for a reply given the timescales they are taking to reply?
– when I de-register – doesn’t that automatically notify them that my taxable activity has now ceased, or do I still need to write to them as above?
– is it possible to reclaim the VAT on the professional fees on the current Jun-Aug return i.e. put the figures in the relevant box (i.e. box 4 and 7), as the sale occurred in the quarter, and then just de-register after that?
– now if I am submitting a VAT return for this hotel unit under my VAT registration number, for period including when I was not an owner (Jul/Aug) – is that relevant/does that matter- i.e. the new owner, will he also be submitting a VAT return for the same unit with the same figures for Jun-Aug, even though he wasn’t an owner in June, but was for Jul/Aug – I don’t understand how the VAT return gets split across the handover to the new owner – or does he just submit his own return under his own registration, and it is not relevant for me?

Many thanks

[plastics77]

Hi Trevor, firstly thank you very much for your clear and detailed reply – it has taken me a while to log back into this site for some reason so have not been able to read responses to my post.
Just to provide some context – we naively bought an apartment hotel suite in a hotel room as an investment a long time ago – we were given a guaranteed income per month for the room and the hotel management would also provide us the figures to submit every quarter for our VAT return, but paid the VAT to HMRC directly on our behalf (and for all other hotel room owners). We became VAT registered simply for this hotel room investment, and have no other taxable supplies or business related to this VAT registration. We managed to find a buyer earlier this year and sold the hotel room unit 2nd July and did not charge VAT on it as both we and the purchaser met the TOGC criteria (purchaser carrying on with the same business – i.e. income from the hotel room, VAT registered and opted to tax).

We were advised (clearly wrongly) that there was no rush to de-register – just complete the next normal VAT return due for the period Jun-Aug and claim your transaction costs for this sale (basically VAT on the legal and agent fees) within that return in the appropriate box – submission of this return is due end of this month/first week of October. Then de-register after that. I can see now that we could have de-registered and then completed the final return to the date of the sale (2nd July) even though it was partway in the-quarter? The figures would be easy, as the hotel management has retained all income since the covid pandemic, so we have been submitting nil VAT returns since the beginning of last year. So our final vat return would be nil again, except for the claim on the VAT for the professional fees for the sale of the hotel room.

However, we are now in what seems a more complicated position as the hotel management a few weeks ago decided to pay hotel room owners the income generated from their rooms in 1st Quarter 2020 into our accounts now, in the middle of this quarter, post-sale – we enquired whether we should therefore be amending the VAT return for that 2020 quarter that this income relates to – and we were told, no, the VAT figures related to this income will be provided to us for submission for this next Jul-Aug return, as the invoice was raised in August

So I am utterly confused and tearing my hair out- we have received Q1 2020 income now post-sale of the unit, we need to fill in the next VAT return Jun-Aug by first week of October – this will contain figures related to this invoice, but our ownership of the unit ended 2nd July. 

So is the easiest thing to do now – deregister, write a note explaining what has happened and then claim for the professional fee VAT costs via VAT427 – if we deregister do we even have the facility to fill in the next normal (Jun-Aug) VAT return in any case – presumably not- or do we have to deregister and ask them for this 6 month grace period to make the declarations for this next VAT return and then submit a ‘final return’ after that. 

Nearly 6 weeks on, and I still have not received a reply from HMRC that I sent on 27th July, which is so frustrating when we are desparately seeking clarity to do the right thing!

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