Time limit is set on HMRC concession.
The concession was given to help businesses following a change of legislation that required self-storage companies to treat the charges made for a person storing goods at their premise as a taxable supply subject to VAT at the standard rate.
In order to offset this HMRC offered self-storage operators the potential to reclaim the VAT they had incurred in constructing or adapting an existing building into a self-storage facility. However, this had only applied to buildings that had been built in the last 10 years and cost over PS250,000 before this concession was introduced.
"Companies may not be aware that it is possible, under what is known as the Capital Goods Scheme ('CGS'), to recover some of the VAT originally incurred, this applies to all buildings but is time limited for those that cost less than PS250,000," says Steven Simmonds, Director of VAT Services at Clement Keys.
"Any self-storage business that has been forced to register for VAT as a result of the change to VAT legislation should review the cost of the building they occupy and decide if it would be financially beneficial to opt in to the CGS and recover some of the VAT originally incurred."