VAT on Storage

Published: 23/11/2013

At the recent Classic Motor Show at the NEC a number of members raised the same query - why has the storage of vehicles now become subject to VAT?

The subject of self-storage of goods was included in the 2012 Budget and with effect from 01 October 2012 supplies of self-storage became standard rated rather than exempt.  However as the subject matter was “self-storage” this was deemed by many businesses that provided storage facilities not to apply to them.

In August 2013 H M Revenue & Customs were obliged to issue a new document making it clear that the change in VAT status from 01 October 2012 applied to storage of goods not just self-storage of goods.  “Goods” is a generic term covering anything that is tangible ranging from a pen to a desk to a motor vehicle or a bus or a traction engine.

So the business that charges you to store your vehicles in what is termed a relevant structure, i.e. a building, a container or a unit, is now obliged to treat the supply as one of services rather than the supply of land.  The supply of services will incur VAT at the standard rate, currently 20%, whereas the supply of land was an exempt supply and fell outside of the VAT system.  The supply of space for storage will incur VAT even if no goods are actually stored, so if you physically remove all your vehicles but continue to rent the space VAT will normally still be chargeable.

In summary VAT is chargeable with effect from 01 October 2012 however should you store your vehicles on a piece of land with no relevant structure then you are unlikely to be charged VAT but that is dependent upon the particular circumstances of the owner of the land.

(The Federation is indebted to Barbara Whale FCA for this information and explanation)

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