with Stephen Headley, of JWP Creers

HMRC are taking a keener interest in income derived from rural diversifications.

Many rural businesses and landowners may risk large tax bills from hosting weddings and other events, under a change in policy.

Farmers who let out land or property as wedding venues may be liable for VAT if they provide any additional service over and above the actual use of the venue.

Whilst the letting of property and land is exempt from VAT, should extra services be provided, the VAT becomes due not just on those services, but on the entire amount – including the charge for the property let.

These extra services could include personal involvement of the property owner, the permission for photography, car parking, advertising, catering and cleaning.

So if you let rooms or land for weddings and provide any additional services then be prepared to pay VAT on everything.

Before making any plans to diversify into this area, it is important to speak to an advisor to seek appropriate accounting and tax advice.

In order to determine if this idea is viable you should assess the current financial situation of the farm or land and consider any potential tax consequences that diversification may bring, such as Capital Gains Tax (CGT), Inheritance Tax (IHT) and VAT.

Contact Stephen Headley or Alastair Byrne at JWPCreers for further advice on 01904 717260 / 01757 703731 or email srh@jwpcreers.co.uk / ajb@jwpcreers.co.uk