VAT guidance for LPA Receivers

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In August 2018 we published an article entitled LPA Receivers and the truth about VAT which explained the legal position in relation to Receivers and the collection and payment of VAT. Recently, the Association of Property and Fixed Charge Receivers (NARA) has produced an updated Guidance Note 6 Value Added Tax which sets out current industry guidance on how fixed-charge receivers should deal with VAT and HMRC.

The guidance note concludes by drawing the following points to the attention of NARA members:

  • it is imperative not to ignore the incidence of VAT on the receivership property. It is the duty of receivers to account for VAT which they handle
  • receivers should use any means at their disposal to establish the VAT registration status of the borrower and of the property
  • enquiry should be made via the HMRC VAT Helpline. This may succeed if the receiver has sufficient detail on the borrower or if the receiver can demonstrate that he has used all other available avenues
  • receivers should always check relevant VAT information (for example, VAT registration number, VAT accounting dates) with the HMRC VAT Helpline even if such information has been provided from another source
  • receivers should always raise an enquiry through the HMRC VAT Helpline to check for any record of a VAT election on the property
  • where VAT is applicable, receivers must account for that VAT to HMRC
  • receivers should exercise care and be ready to seek, and take appropriate specialist advice.