VAT and conversion
Company has purchased a Town Hall and is looking to convert the downstairs into Restaurant / Bar and the upstairs into apartments. The intention is to let all units on short term leases (under 15 years). This will be done in two stages with the downstairs being done first. Presumably if the client wants to reclaim VAT on the conversion costs re the Restaurant / Bar he will need to register for VAT and opt to tax the property. Also as I understand it the VAT charged by builders re the proposed 2nd Stage (ie Apartments) will be charged at 5% as converting commercial to residential but there will be no input tax reclaim available. Can anyone please confirm my understanding.