Commercial Rent - Invoiced or not?

BenEadir

Hi all,

On a long term lease (e.g. 35 years) between a lessor and lessee where the lessor is an individual and the lessee is a limited company does the lessor issue a monthly or quarterly VAT invoice to the limited company for rent assuming the lessor is registered for VAT?

Apologies if this is a silly question. I assumed rent would be invoiced but a friend who owns a restaurant on a 35 year lease insists her limited company doesn't receive invoices from her landlord for rent. I asked her how her accountants account for rent in the annual accounts if no invoices for rent are received and she just shrugged her shoulders :eek:

Cheers.

jimmii

I don't get an invoice for it either. Just having the lease with the amount quoted was deemed acceptable. Hope that is enough as I would probably find it a nightmare getting that from my landlord!

barneystinson

BenEadir wrote: »

Hi all,

On a long term lease (e.g. 35 years) between a lessor and lessee where the lessor is an individual and the lessee is a limited company does the lessor issue a monthly or quarterly VAT invoice to the limited company for rent assuming the lessor is registered for VAT?

Apologies if this is a silly question. I assumed rent would be invoiced but a friend who owns a restaurant on a 35 year lease insists her limited company doesn't receive invoices from her landlord for rent. I asked her how her accountants account for rent in the annual accounts if no invoices for rent are received and she just shrugged her shoulders :eek:

Cheers.

Are they paying VAT on the periodic rent?

BenEadir

barneystinson wrote: »

Are they paying VAT on the periodic rent?

No, they're not paying VAT as the lessor isn't registered for VAT. The lessor rents out this one building and total annual rent is €30,000 per annum which IIRC is under the VAT registration threshold.

Perhaps the rule is if the rent is changed on a VAT basis an invoice must be issued to the lessee by the lessor but if it's not charged with VAT no invoice is necessary?

pedronomix

If there is vat then there must be an invoice for the rent being paid. Terms of the lease will state whether this is weekly/monthly/yearly etc!!

BenEadir

pedronomix wrote: »

If there is vat then there must be an invoice for the rent being paid. Terms of the lease will state whether this is weekly/monthly/yearly etc!!

In the case of the lease I'm referring to there is no VAT and the lease simply states that the rent must be paid to the lessor quarterly in advance. There is no comment in relation to invoicing.

pedronomix

The lessee is entitled to a receipt for each payment, this will normally suffice for accounting purposes and wise to have in any event!!

delahuntv

Your lease is a legal document and is valid as a payment record for tax purposes. - I've had leases in some of the larger shopping centres and only ever got an end of year statement.

If vat applied, then its not unusual for a annual vat invoice to be sent in advance with the dates marked.

If any doubt, just ask for a statement and this combined with the lease agreement will be good for annual accounts.

BenEadir

Thanks for the clarifications guys. Much appreciated.