VAT KICKS IN

It’s the 1st of October 2012 and we’d like to remind our self storage customers once more that we will have to charge VAT on our weekly self storage rates from today.

Please note that our weekly rate prices will still be the same, it just means that they are now subject to VAT.

This new legislation was part of the Finance Act 2012 which received Royal Assent earlier this year. At the time (on the 22 March 2012) The Telegraph was quoted as saying;

“Big Yellow and Safestore said they will have to start charging customers VAT on storage if proposals from the Treasury become law from 1 October. Shares in Big Yellow, Safestore and smaller rival Lok’nStore slumped today as investors digested the budget… the companies said they will ‘actively engage’ in discussions with the Government and hope to stop the tax increase.”

The tax increase was not stopped unfortunately and we received the following explanation on behalf of HMRC;

“Around 30 per cent of self storage is currently taxed because of the option to tax. Some self storage providers have never opted to tax but those that do are able to reclaim VAT on the costs of constructing or purchasing their storage facilities. Some self storage providers have used avoidance arrangements to convert their taxable supplies back to exempt supplies, gaining an unfair advantage over their competitors.

Secondary legislation will amend the VAT Act so that the supply of self storage, including that allocated to a particular client,  is added to the list of exceptions meaning it can no longer be exempt from VAT.”

VAT aside, as a company we will continue to offer discounts to all our self storage customers here in the Rochdale and Manchester area that are looking to store their goods with us for four weeks or more.