Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Interest definition

What does Interest mean? Interest is the additional sum payable for the time‑value of money: the amount a borrower pays a lender for using money, the return on debt‑type investments, and the sum awarded for being kept out of funds in litigation. Entitlement arises by: - Contract (contractual interest), including default interest, fixed or floating rates (for example, over base rate or SONIA), and simple or compound interest. Clauses must be clearly drafted and not operate as an unlawful penalty or unfair term. - Statute (statutory interest), for example late payment interest on commercial debts under the Late Payment of Commercial Debts (Interest) Act...

UK VAT on Storage Facilities: Beyond 'Self-storage', Scope, Headleases, Ancillary Use, Exceptions and Landlord Obligations

Published by a LexisNexis Tax expert

Practice notes

This Practice Note concerns the .

Why does this matter?

From 1 October 2012, supplying storage facilities has broadly fallen within the scope of VAT; yet many organisations impacted failed to appreciate this, as HMRC and the government continued for a long time to characterise the reform as concerning ‘self‑storage’ alone. In reality, the point is still frequently missed, and HMRC seems largely uninterested except where dealing with genuine self‑storage providers and operators. Because HMRC considers liability to turn on how premises are actually used rather than the intended use, landlords should carefully track what their tenants do and/or add further terms to leases and licences to identify precisely where VAT bites.

What do landlords need to do?

No steps are required where the grant is already taxable, for instance due to an Option to tax being in place. Otherwise, where lettings are being treated as exempt, they should verify whether the tenant’s use of the space gives rise to a VAT charge and, as this may alter over the life of the lease, review the position from time to time and keep it under review...

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Martin Scammell

Martin Scammell is an independent VAT consultant, specialising in property and construction matters, who works with tax departments in major corporates and universities, and with a number of law and accountancy firms. He is the author of the leading reference work on VAT and property.Martin started out in VAT Policy in Customs & Excise, was a Partner at Ernst & Young, where he headed up the VAT real estate group, and then became head of indirect tax at Eversheds.He has been involved in the development of VAT legislation and policy over many years, and regularly serves on working parties established by HMRC. He was a member of the Office of Tax Simplification’s consultative committee for their review of VAT in 2017, and in 2018-19 of HMRC’s external stakeholder group considering the proposed reverse charge for building work. Martin currently works with HMRC as...

Web page updated on 22/05/2026

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