VAT on Rent Deposit

[LGripper]

Just need to clarify whether or not VAT can be charged on a rental Deposit. (both parties are VAT registered)

[J7J]

No, it shouldn't be charged or claimed by either party.

[Justloadit]

You may only charge VAT when a transaction is concluded. Receipt of the deposit is not a complete transaction.

What is interesting though , if the deposit is to cover defaulting rent, then an invoice must be generated with VAT must be created as a normal receipt of rent. Ensure that your deposit includes the vatable amount, or you will be out of pocket for the VAT portion.

[LGripper]

Thank you very much.