Changes to the VAT treatment of storage facilities were introduced with effect from 1 October 2012 and recently issued HMRC guidance shows that it expects landlords to be aware of what their tenants are using premises for.

The new rules mean that VAT is automatically chargeable on most leases and licences of storage facilities where landowners have not previously opted to tax. Where storage is ancillary to the main business carried on from the same premises, VAT is not automatically chargeable unless landowners have previously opted to tax.

A lease or licence should oblige the tenant/licensee to inform the landowner about a change in use of the premises.

HMRC guidance can be found here.