VAT: Notifying an option to tax

Changes to the option to tax notification process

From 1 February 2023, HMRC will stop issuing option to tax notification receipt letters. Prior to this date, HMRC would have sent a standard option to tax notification receipt.

The following process should be followed to notify an option to tax:

  • Send an option to tax notification by email to
  • In the subject line the following should be included:
  • property address, including postcode;
  • effective date of the option to tax notification.

The above will trigger an automated response providing you with the date when the notification was received by HMRC which you should keep for your records.

A notification sent any other way than by email, will not get an acknowledgement or receipt.

Confirming the existence of an option to tax

It is, and will still be your responsibility, when notifying of your option to tax, to keep such information as part of your business records. These should be kept for at least 6 years.

HMRC will only respond if a record of an option to tax is held for the relevant property, if a request is made under one of the following conditions:

  • the effective opted date is likely to be over 6 years ago;
  • if you’ve been appointed as a Land and Property Act receiver, or an insolvency practitioner to administer the property in question.

If these conditions are met, HMRC will ask you to provide details for the associated land or property, or both. This must be accompanied by a letter or deed of appointment for your role, otherwise HMRC will be unable to help. The details you must provide to HMRC are as follows:

Stephen Callaghan
  • name of the business or person who opted to tax the property;
  • VAT registration number (if applicable);
  • full address of the land or property in question, including postcode;
  • effective date of the option to tax, if known;
  • date you first charged VAT on the opted land or property;
  • date the property was either acquired or a loan was taken out (or both) by the opter on the relevant property;

We would advise that you contact your usual person at RG for advice and assistance on the VAT implications covered above, or indeed any other matter that you may need assistance on.

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