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Where Taxpayers and Advisers Meet

Reclaim VAT - Property Repair Costs?

RSTA
Posts:2
Joined:Wed Aug 06, 2008 3:07 pm

Postby RSTA » Thu Feb 05, 2004 4:13 am

With the supplus cash in the business (telecoms), we have just recently purchased through the company a property to make the necessary repairs and rent out.

With regards to the cost of repairs (£10k) can we reclaim back the VAT (£1,750) ??.

Thanks

Russ

paultaylor@vatease.c
Posts:397
Joined:Wed Aug 06, 2008 3:02 pm

Postby paultaylor@vatease.c » Fri Feb 06, 2004 2:12 am

That would depend entirely on what type of property you are purchasing (commercial or residential) and who will be renting it.

With a bit more detail I may be able to give you a fuller answer.

Regards

Paul Taylor
http://www.vatease.co.uk/
0121 778 4299

RSTA
Posts:2
Joined:Wed Aug 06, 2008 3:07 pm

Postby RSTA » Fri Feb 06, 2004 3:42 am

Paul

The property will be residential - renting to possibly students or professional individuals.

I am pretty certain the rental income and costs of repairs to the property are treated within the normal trading of the company.


Russell

hq@vatease.co.uk
Posts:13
Joined:Wed Aug 06, 2008 2:18 pm

Postby hq@vatease.co.uk » Mon Feb 09, 2004 1:35 am

Hi Russell,
Rental of residential property is VAT exempt which means that VAT incurred on the repairs and maintenance of the property will not be recoverable.
However, because as I understand it the property rental will form part of the company trading activities, you may be able to recover some of the VAT through what is called "partial exemption". This is a calculation that should be performed every VAT quarter with an annual adjustment at the end of the VAT year. If you need further information Paul or I will be pleased to assist. You can contact us on the number or e mail address below.
Kind regards
Simone Hurst-Franks
Principal
VATease
0121 778 4299
simone@vatease.co.uk

Ian McTernan CTA
Posts:1232
Joined:Wed Aug 06, 2008 3:02 pm
Location:Bedford
Contact:

Postby Ian McTernan CTA » Tue Feb 10, 2004 2:38 pm

You are endangering the business asset taper relief of the telecoms company by purchasing this asset through the company- please seek advice from the tax adviser or accountant who prepares the accounts before going any further down this route!

Ian McTernan CTA
McTernan Associates Ltd
Chartered Tax Advisers
ian@imcternan.com
McTernan Associates Ltd
Chartered Tax Advisers
Bedford
Email through link on website:
http://www.imcternan.com


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