Readers’ forum: VAT issues on conversion and subletting of barn

I have recently taken on a new client who will be entering into an agreement to rent a barn from a farmer for £50 000 a year plus VAT.

She will then sublet eight different treatment rooms to individual traders such as therapists masseurs and physiotherapists.

My plan is to register the client for VAT and opt to tax the building so that she will charge VAT on her rental income. But is this necessary because most of the renters will be small traders and not registered for VAT?

A further twist is that the farmer wants my client to finish off the barn conversion by engaging the builders herself. This will cost her £150 000 plus VAT – not a problem because she has the cash flow to pay the builders unlike the farmer. In return she will receive three years’ free rent...