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Where Taxpayers and Advisers Meet

Vat on building purchase

Posts: 73
Joined: Wed Aug 06, 2008 3:53 pm

Vat on building purchase

Postby Herbs16 » Wed Oct 24, 2018 4:36 pm

I am buying land as a limited company and putting a building on it solely for the limited company to use. To claim back the vat relating to the land and building, do I need to complete an option to tax form for the land and buildings? Its from a developer who is charging vat

Many thanks

Posts: 251
Joined: Tue Sep 26, 2017 6:28 pm

Re: Vat on building purchase

Postby AdamS93 » Wed Oct 24, 2018 9:26 pm

It depends on what you plan on doing with the building and whether the company will be making taxable supplies.

Option to tax is more relevant when you plan on renting out the property.

If you opt to tax the property you will have to charge VAT on sale of the buidling.

You should seek professional advice. I presume the amount of VAT at stake is quite large...

Posts: 73
Joined: Wed Aug 06, 2008 3:53 pm

Re: Vat on building purchase

Postby Herbs16 » Fri Oct 26, 2018 10:44 am

But if we don’t opt to tax it, then we can’t claim the vat on the land invoice and also the construction itself?

It won’t be rented out for many years, it is for us to trade out of.


Posts: 575
Joined: Wed Aug 06, 2008 3:09 pm

Re: Vat on building purchase

Postby les35 » Fri Oct 26, 2018 11:08 am

If you are carrying out taxable business activity from the building you do not need to opt to tax. You can claim the input tax.

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