Pictured above: Joanna Thexton-Pee
Birmingham businesses could save paying hundreds of thousands of
pounds in VAT by paying their rent early, according to a city based
property expert.
Joanna Thexton-Pee, associate and head of client accounting at
Cushman & Wakefield in Birmingham, said early payment was the
best way of beating the New Year VAT rise, which will see the tax
shoot up from the current 17.5 per cent, to 20 per cent. It would
also aid cash flow through the first quarter of 2011.
"VAT is a grey area - but if someone wants to pay for their rent
ahead of the 4 January deadline, they can do so at the current
rate," she said.
"We understand that up to six months rent can be paid up front
without being in breach of the tax regulations."
All property agents in Birmingham have agreed on a common
approach to the VAT rise, and will be advising their clients that
they can pay at the lower rate without being penalised.
This approach was thrashed out at a meeting of the newly formed
Birmingham head of property management accounts forum, which Mrs
Thexton-Pee chairs.
The forum includes all of the major property management firms in
the city, including Cushman & Wakefield, DTZ, BNP Paribas,
Jones Lang LaSalle, CBRE and GVA Grimley.
Together, these firms manage the financial side of the city's
many commercial properties, and this includes gathering rent,
arranging for the payment of suppliers. The sums involved add up to
millions of pounds, and form a large part of the regional
economy.
Mrs Thexton-Pee said it was the first time a forum had been
established in Birmingham that would allow heads of property
management accountants the chance to get together over common
issues.
She said that this was important, as there was a great deal of
crossover in the industry. This included transferring property
management duties from one agency to another, a common event
usually caused by a change in the ownership of a building.
"Previously, there had been no forum for talking about issues
and problems and sharing solutions, such as the common courtesies
involved in moving properties between agents - the VAT change is
another good example of an issue where a common solution was called
for," she said.
"The forum enabled us to come up with a unified approach to the
change, and in particular how we go about rent raising on behalf of
clients."