Reclaiming VAT

[jonlumb@ismdirect.co]

Situation:
Buying Property for £600k, renovation cost £400k Other Costs £100k (inc. VAT)
Sale Value £1,300k
The Renovattion and Other Costs will incur payment of VAT, but the cost of property does not.
The Sale does not attarct VAT

Can I claim the VAT back on any building/renovation costs?

[paultaylor@vatease.c]

Is this a commercial or residential property?
Who are you selling it to?
Have you changed the use of the property?

Unfortunately there is not enough information here to provide an answer.

I strongly recommend that you engage professional advice. Structured correctly you may be able to reclaim the £70k VAT incurred. Structured incorrectly then you will not.

VATease would be happy to help.

Regards

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

[jonlumb@ismdirect.co]

Thanks for your reply Paul

This is going to be a commercial venture (possibly through a Ltd Co or not). As I understand it this is not relevant.

It is currently a barn with PP for conversion to two residential dwelliings. Sale will be to general public through normal Estate Agency channels after completion of works.

Assuming I pursue this I will without doubt seek professional advice, but in the meantime any basic guidelines would be useful

Thanks

Jonathon

[paultaylor@vatease.c]

John,

It will be relevant whether you complete the conversion as a business activity or not but it is not relevant whether it is done by a Ltd Co or not.

Provided the barn has not been lived in previously then the eventual sale will be zero-rated. You will be entitled to recover VAT on most of the costs incurred.

Further, it is likely that, if you buy in the construction services, these should be chargeable at just 5%.

Regards

Paul Taylor
http://www.vatease.co.uk/

[VAT officer]

ALL qualyfying works will be charged at reduced rate. You are able to claim this back whether you do this job by your business or as a personal aspect. It's only relevant to know what procedure to follow for input tax claims. You will claim back the VAT via your VAT return if you are a VAT registered company. If you are not VAT registered you are unable to claim back the VAT as a business venture but are able to do so under DIY conversions as a personal venture.

[jonlumb@ismdirect.co]

Dear VAT Officer
Thanks for this , but I am uncertain as to exactly the situation.
I could go into details on this forum or preferbaly would appreciate having a converstaion.
Can I contact you by phone for further advice
Jonathon