TVA rate for gite rental ?

[Eslier]

There is a distinct probability that, next year, our turnover could exceed the TVA threshold by a smallish amount.

If we go down this route and have to charge TVA on rentals, can anyone tell me, for certain, what rate applies ?   I have been advised that it is a "split rate" but am not sure what this is.

I have to do the sums before setting rental rates for next year. Basically, I have three options:

1) register for TVA next year and deal with the financial implications - some good some bad

2) change one of the properties to long term let (income then not included as part of business turnover)

3) simply stop taking bookings when turnover reaches just below the €72k threshold

I would be interested to hear from anyone else who has been in a similar position and can offer any advice.

[BJSLIV]

Which business are you in gite rental or B&B/ Table D'Hote?.

 Aren't gites (ie property rentals)  normally exempt from TVA anyway ?

http://gites-de-france-limousin.tib.cc/PDF/amenager_gite_groupe.pdf

[Will]

I would say that if you are getting into a position whereby you need to consider TVA, then getting an accountant is an absolute must.

As soon as you exceed the micro-business threshold then you automatically enter the wonderful world of TVA, there is little or no element of choice in the matter. This means proper accounts, and even if VAT is not charged on the service you provide (or it is zero rated, which is not necessarily the same thing to an accountant) then you will be able to reclaim TVA on your expenses, so you should more than cover the accountant's fee. The possible penalties etc for not doing proper TVA returns are another good reason for getting professional help.

[Eslier]

Thank you for you comments. I already have an accountant, I already produce proper accounts, I am already on the régime réal, and I already know about how and when I would need to register for TVA and how returns are made. As you can see from my original post, I have three options to consider; any of which are completely legal and come with my accountants blessing. The business is solely gite rental. We are registered for B&B/Tables d'Hote too, but havent needed to offer this service since our first year.

When talking to my accountant however, she was not certain exactly what rate of TVA applies to gite rentals, hence my question. She will research this and eventually come back to me but I was hoping to get a quicker answer from someone who has already been there.

There are, most certainly, advantages to being able to claim TVA relief against expenditure in France. Unfortunately, it's not so easy to claim back VAT paid to UK companies for things such as advertising. It's not impossible but would mean submitting vat returns in the UK, as well as in France and the associated accountancy costs would probably not make it cost effective. This is why I need to have all the facts an figures before I make a decision which way to go. At the moment, as it seems unlikely we would exceed the TVA threshold by a huge amount anyway, I am tending towards just opting to stop taking bookings when we reach turnover just below €72k.

There must be someone ou there who has been in a similar position who can offer some advice. I would be very interested to hear how things worked out for anyone who has become TVA registered.

[BJSLIV]

If you were TVA registered you wouldn't pay VAT in the UK you could quote your French Reg and pay the bills without VAT being charged.

 

[Will]

My apologies - but it certainly was not clear from your original question that you already used an accountant. It read more as if you had previously operated under one of the micro-bic or micro-bnc regimes, for which accounts are not normally needed and TVA is neither chargeable nor reclaimable. I am surprised, though, that your accountant does not have information to hand on TVA rates, ours can quote most of  them off the top of his head. Miki would probably have an answer for you, but I know that he is away at present.

You are quite right that under most circumstances it is impractical to try to reclaim UK VAT in France, although it is theoretically possible. In practical terms it is also difficult to avoid paying VAT on most things obtained in Britain - the VAT-inclusive price just goes down as a business expense as it is, and most accountants and tax offices seem to accept it as such.

Although I have no direct experience of gite rentals, I do have experience of operating below, above, and close to the TVA-registration threshold in France. From that experience I would favour your third option of staying below the threshold and keeping things simple.

If you are planning any substantial TVA-liable work that could be offset as a business expense it might be worth going for TVA registration, though building repair work is still at 5.5% so that limits the benefits, and reclaiming French TVA is not always an easy process. Long term lets in France can put a lot of restrictions and conditions on the landlord and would have serious implications should you ever want to sell your property.

[Eslier]

Thanks Will, that's good advice. Sorry, you would think, by now, that I should have realised the need to be more specific with my first post !

BJSLIV, you are right that it should be possible to have items that are supplied and despatched from the UK to France invoiced without vat. Unfortunately, as has been clarified to me by my accountant, things like advertising and UK mobile phone bill etc. are for a service that is provided within the UK and therefore UK vat has to be charged. It would only be possible to reclaim these amounts by submitting a UK vat return. Likewise, with anything purchased in the UK and brought back to France personally, it would be a lot of hassle to show proof that these items had been taken out of the UK and into France. VAT would be correctly charged by the retail outlet and it would be necessary to claim this back somehow. The UK "Retail Export Scheme"  is not applicable to items exported to EU countries.

[SC]

I'm sure that I recall that LF don't charge VAT to advertisers if you provide them with a TVA number. Others should be the same.

I used to import to the UK and didn't pay TVA on the invoices as I was VAT registered there.

Although I'm all for keeping things simple, if you're already producing proper accounts and you find there's 0% TVA on gite rentals, you'll be in a similar position to a farmer in the UK who only charges VAT on wool, but reclaims on everything else [:)]

Steve