HMRC have announced further changes to the Option To Tax (OTT) process, which will take effect from 1 February 2023. In future, HMRC will only give confirmation of the existence of an OTT in limited circumstances.

Confirmation of existing Option To Tax notifications

From 1 February 2023, HMRC will only process requests to confirm the existence of an Option To Tax (OTT) where:

  • The effective opted date is likely to be over six years ago.
  • The request is made by a Land and Property Act receiver or an insolvency practitioner, to administer the property in question.

In such cases, the request for OTT confirmation must be accompanied with:

  • The name of the business/person who had opted to tax the property.
  • A VAT registration number (if applicable).
  • The full address of the land/property in question, including the postcode.
  • The effective date of the option to tax, if known.
  • The date the taxable person first charged VAT on the opted land/property.
  • The date the property was acquired and/or a loan was taken out by the opter on the relevant property.
  • Where applicable, a letter or deed of appointment to the role of Land and Property Act receiver or insolvency practitioner.

Where there is doubt or concern about the existence of an OTT which may have been exercised within the last six years, advisers and taxpayers may wish to make an OTT confirmation request with HMRC before the change in policy.

OTT notification receipt letters

From 1 February 2023, the only receipt HMRC will provide for an OTT notification will be the automated email response given when an OTT notification is emailed toThis email address is being protected from spambots. You need JavaScript enabled to view it..

  • This automatic response should be retained by the taxpayer as it confirms the date of notifying HMRC of the OTT.

OTT notifications submitted by other means will not trigger a receipt or acknowledgement from HMRC, although HMRC will respond where further information is required.  

Useful guides on this topic

Opting to tax land and property
What is an Option To Tax? What do I need to do to opt to tax? What happens if I buy an opted property?

Land & Property VAT (Subscriber guide)
An outline of the VAT treatment of some of the more common supplies of land and property.

Land & Property VAT at a glance
A summary of VAT on common land and property transactions.

Land & Property: Non-residential
This guide considers the VAT treatment of the supply of non-residential property.

Transfer of a Going Concern (TOGC): Properties
How do the TOGC rules apply to land and property?

External links

Source: ICAEW

Revenue and Customs Brief 1 (2023): changes in processing option to tax forms by the option to tax national unit

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