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Opt to Tax

Late registration

Client purchased property through new limited company at the end of July 2018.  VAT registration and effective date of option dated 1 October 2018 (I was not involved in the paperwork).

I intend to ask client if VAT was charged to any tenant from July to end of September 2018 and if he has any earlier evidence of decision to opt to tax.  If there was rent charge and evidience of opt to tax, does anyone see a problem reclaiming the VAT on purchase?

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06th Dec 2018 16:40

No, but HMRC may!

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to leshoward
07th Dec 2018 07:48

Hmm, any tips?

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to Rammstein1
07th Dec 2018 08:41

It is not easy to predict how HMRC will react. Will they be pragmatic and helpful, or not?
The risk is that HMRC will review the VAT Return of which the input tax is claimed, and deny it because of the timing.
You could let that run, and address it then; or pre-exempt by back-dating the registration and option to tax.
(Life would be much easier if HMRC were predictable!)

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to leshoward
07th Dec 2018 09:25

Cheers Les, much appreciated. I find your articles interesting as well!

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07th Dec 2018 10:28

If there wasn't a VAT rent charge and he wants now to claim VAT retrospectively he certainly will [***] off his tenants

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