Over the threshold

Our client Mr A runs a wedding venue operation from a stately home although the property is actually owned by his non-resident brother Mr B.

For each wedding Mr B charges a flat rent of £10 000 for the use of the house and gardens. Mr A prepares a bill on Mr B’s headed paper and collects this charge for him. No VAT is charged on the basis that this is an exempt supply. As may be imagined the total annual rental income is way over any VAT threshold.

Mr A then deals with the wedding arrangements themselves via his limited company C Ltd. This includes buying in caterers staff drinks a band etc. and he bills these charges separately to the client including his profit and adding VAT. As mentioned above the bill for the house...