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Will a farmer need to deregister for VAT if he rents his land to others, rather than working it himself?

Q: My client has a farm but has decided to cease trade and will instead rent his (bare) land out to other farmers. As he's won't be trading any more - presumably he needs to deregister?

A: Not necessarily. Supplies of land (e.g. rental of fields) are still business activities for VAT purposes, even though it might not be considered a "trade" for direct tax purposes. If that rental income is taxable (for example if the farmer has opted to tax the land making it standard-rated, or he is actually supplying zero-rated grazing rights) he can (and may be required to if this taxable income is over the VAT registration threshold) stay VAT registered and recover VAT on associated business costs in the normal way.