COVID-19 Extension to option to tax deadline for land and buildings

HMRC has announced temporary changes to the time limit and rules for notifying an option to tax (OTT) land and buildings during the COVID-19 outbreak.

Under the normal time limits, there is a requirement to notify HMRC of a decision to opt to tax land and buildings within 30 days by either:

a) Printing and sending HMRC the OTT notification, signed by an authorised person within the business; or

b) Emailing a scanned copy of the signed notification.

Due to social distancing in response to the coronavirus outbreak, HMRC have noted that it may be challenging to follow the above rules. HMRC have therefore temporarily changed the rules to help businesses, and agents during this challenging time, which we have outlined below.

1. Changes to the time limit

HMRC has temporarily extended the time limit to notify HMRC to 90 days from the date the decision to opt was made.  This applies to decisions made between 15 February and 31 May 2020. All notifications can be sent to optiontotaxnationalunit@hmrc.gov.uk.

2. If you are notifying an option as a business

The OTT notification can be submitted to HMRC with an electronic signature, but HMRC need evidence that the signature is from a person authorised to make the option on behalf of the business. Examples of supplementary evidence include emailing the notification:

  • With an email from the authorised signatory to the sender within the business, giving authority to use the electronic signature;
  • From the authorised signatory with their sign off in the email and the form; or
  • With an email chain, or a scan of correspondence showing the authority given by an authorised signatory.

3. If you are notifying an option as an agent

In cases where an agent is notifying HMRC of a client’s decision to opt, the notification can be emailed with an electronic signature, however you also need to send HMRC proof that:

  • The signature is from a person authorised to make the option on behalf of the business; and
  • Authority has been granted to you by the business to use the electronic signature.

Examples include emailing the notification:

  • With a current email, or email chain from an authorised signatory of the client’s business, giving you authority to use this signature and send it to HMRC on their behalf;
  • With a scan of the correspondence showing authority is granted by an authorised signatory to use their electronic signature on the form, and to also send this form to HMRC on their behalf.

Consideration should be given to the points outlined above to ensure that any OTT notifications sent to HMRC are processed in a timely manner.

If you have any queries in relation to this, please do not hesitate to contact our VAT Director, Iain Masterton (iain.masterton@chiene.co.uk).