HMRC’s Form VAT1614J has been updated. This form is used to revoke an option to tax (OTT) land or buildings for VAT purposes after 20 years have passed. There is a new address to which the form and supporting documents are sent:

BT VAT

HM Revenue and Customs

BX9 1WR

Scanned copies of the form can be emailed to: optiontotaxnationalunit@hmrc.gov.uk

Background: Revoking an option where more than 20 years have elapsed since it first had effect.

A business may revoke an OTT without prior permission from HMRC where more than 20 years have elapsed since the option first had effect. This is done by submitting the Form VAT1614J.

When the OTT first has effect: An OTT first had effect on the day it was exercised, or any later day that was specified when opting to tax.

Who can revoke: The relevant guidance VAT Notice 742A – which has the force of law here states that the ‘Taxpayer’ can revoke the OTT. The taxpayer is defined as the person who exercised the option to tax or is treated as making that option by virtue of a real estate election.

When the revocation will take effect: The revocation will take effect from the day that the taxpayer specifies when HMRC is notified, but this cannot be any earlier than the day on which the taxpayer notifies HMRC.

Outcomes of revoking an Option To Tax

• any income (rent or sale) relating to the property becomes exempt
• any input tax relating to the property is not recoverable (subject to the de minimis rules)
• if no other taxable supplies are made a business must deregister

Revocation of option: The VAT Act 1994, Schedule 10, 25(1)(a).