VAT payable by offshore company on refurbishments

VAT payable by offshore company on refurbishments

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A client owns a property in the UK through an offshore company based in Guernsey. The property has an outbuilding which the offshore company wishes to extend and refurbish. Can the offshore company reclaim VAT on the extension and refurbishments.

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By spidersong
22nd Mar 2011 09:23

What are they doing with the property

The place of supply of land related services (construction/refurb) is the place the land is. So whoever supplies them will (if registered) charge VAT.

They'd only be able to recover this VAT if they incurred it in the course of their taxable business, since this is to do with property that would likely mean that they'd be making supplies in the UK, and so need to register in the UK in order to recover any VAT (assuming those supplies are taxable and not the normal exempt supplies that you'd make with land).

So basically we need to know; Is the offshore co. UK VAT registered?, Does it make any supplies in the UK?, Is this a commercial or residential building?, what will it use the refurbed building for?, what does it use the current building for?

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By m_popat
22nd Mar 2011 10:47

VAT payable by offshore company on refurbishments

The offshore company is not registered for VAT. The property at the moment is used as residential but bacause it is very large with lot of land and lake etc the client is thinking of offering it for filming to film producers. If this is done then this would be taxable supply for VAT purposes so may be they can register for VAT on that basis. What do you think.

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