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Where Taxpayers and Advisers Meet

Sale of car park with commerical property

Curious Beast
Posts: 11
Joined: Tue Jul 30, 2013 3:35 pm

Sale of car park with commerical property

Postby Curious Beast » Mon Jul 13, 2020 11:26 am

Hi all

I'm clear on the VAT rules re letting a car park (i.e. the provision of car parking is excepted from the exemption at Sch 9), but I'm struggling to find clarity where the car park is outright sold along with a commercial property. Will the VAT treatment of the car park (which is adjacent to the building) just follow that of the property sale, or will it need to be standard rated separately?

Everything I can find relates to letting, licensing or leasing, not an outright sale.

Trevor S
Posts: 64
Joined: Tue Jan 01, 2019 12:37 am

Re: Sale of car park with commerical property

Postby Trevor S » Mon Jul 13, 2020 10:38 pm

You're right, the freehold sale of a car park is different to letting. Letting is covered by item 1(h) of Schedule 9 Group 1 excludes from exemption "the grant of facilities for parking a vehicle". But this wording doesn't really fit for a sale.

The freehold sale of a car park is treated in the same was as that of a commercial building or civil engineering work. Exempt unless it is either incomplete or new - see item 1(a) of the same group. "New" means less than 3 years old - see note 4 to that group.

HMRC guidance covers this in Notice 742, paragraph 4.3, final bullet point, with references to 3.2 and 3.3.

Even if it is more than three years old, as an exempt supply under group 1 it would still be affected by an option to tax. There may also be a TOGC (Transfer of a Going Concern) - for example, if both seller and purchaser operate it as a charged for public car park. HMRC notices on the option to tax and TOGC are 742A and 700/9.

You mention that the sale will be with that of a commercial property. There is then the potential question of whether you're making a single or multiple supplies - which will be very much dependent on the specific facts. However if the two elements would both have the same VAT liability anyway, you don't need to consider this.


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