Councillor Questions VAT Charge On Workspaces

Porthmellon Innovation Centre NightA St Mary’s Councillor is unhappy that the Town Hall is adding VAT to its new business unit rents.

The offices on the old wholesalers site were designed for new, start up businesses but Cllr Gordon Bilsborough says that adding 20% to the rent is an unnecessary burden.

In Tuesday’s Council meeting, Gordon produced government advice suggesting that adding VAT is discretionary for a Local Authority when letting buildings that aren’t residential.

But senior officer Diana Mompoloki and Cllr Ted Moulson told Gordon that occupants will only have “a licence to occupy” as the workspaces are intended for short-term use.

It is not a lease, so VAT applies.

And Diana said because the Council has claimed back the VAT on the building costs, they have to charge it in the rent.

When Gordon continued questioning that, Diana advised him that they had followed the Council’s legal advice.

Gordon says he intends to continue researching the VAT issue.

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