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Where Taxpayers and Advisers Meet

VAT on new commercial building

Tom7000
Posts:74
Joined:Wed Aug 06, 2008 3:30 pm
VAT on new commercial building

Postby Tom7000 » Fri Oct 04, 2019 12:26 pm

I know the answer to this. But the numbers are so big I just need someone to agree with me....help!

Question

A regular UK trading Ltd company which is standard vat registered with no exempt or even zero rated supplies is going to move out of its rented premises and buy a new empty building and trade from it.

It wants to reclaim the vat on the building. The question is can it just simply pop the huge number that is the vat in the purchases ( box 4) of the vat return in its next quarter.

Answer
Yes because
1. It is vat registered
2. It has no exempt supplies.
3. It will be part of the capital goods scheme but as long as it stays there for 10 years its ok
4. It does NOT need AN OPTION TO TAX because its not going to be let out to anyone.

Thank you

Nervous of Farnborough

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: VAT on new commercial building

Postby AdamS93 » Fri Oct 04, 2019 1:00 pm

You are correct (your client may be reclaiming a lot of VAT, but the vendor will be paying it over to HMRC).

You just have to keep one eye on the capital goods scheme (sale, change of use etc.)

Make sure there is all the valid paperwork!


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