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HMRC internal manual

VAT Registration

Voluntary registration: particular trade sectors: landlords managing commercial property

Traders who make certain charges to their tenants for the provision of common services to multi-occupied buildings (such as managed workspace units) often seek to register for VAT, sometimes before they are ready to let the property, in the belief that those charges are the consideration for a taxable supply. In fact, only services in respect of the tenant’s own unit or offices (such as cleaning, heating, lighting and photocopying) are likely to be taxable.

Please be aware that, in an attempt to gain registration, some traders have been known to mis-describe their supplies and manipulate values in order to inflate the taxable element and depress the exempt element. It is suggested that officers should examine estimates of projected taxable supplies and satisfy themselves that their value and liability have been correctly determined in accordance with Notice 742 Land and Property before allowing registration.