I am condsidering purchasing a property which has part commercial and part residential. The whole building has been opted to tax and I will have to pay VAT on the agreed purchase price.
If I apply to HMRC to "disapply the option to tax" as I want to convert the building and land to all residential. If HMRC accept this, does this mean I will not have to pay VAT on the purchase price.
Thankyou in advance for your help.
Replies (1)
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VAT1614D - correct
Provided that VAT1614D is completed and handed to the vendor at the correct time then no VAT is charged by the vendor - in the vendors hands the would-be VATable sale becomes a VAT exempt sale.
This can be disadvantageous to the vendor (as input tax recovery issues / potential clawbacks) that's why the VAT1614D needs to be in the hands of the vendor before contract.