Client runs a quite up market B&B and is on the flat rate scheme.
Last year she decided that the carpets in the B&B needed replacing and these cost over £2,000 in a single transaction from a single supplier and so the client claimed the input tax as relating to capital expenditure goods.
The vatman is now saying that this does not meet the conditions of VAT Notice 733/15 and has also referred my client to VAT Notice 708/12.2 and 708/13.7 as backup for his decision.and has also made reference to the VAT Toolkit page 4.
To my mind, carpets are certainly capital in this context and I would classify them along with other fixtures and fittings that go in such a B&B.
From what I can see 708/12.2 refers to developers and I cannot see that it is relevant and similarly 708/13.7 follows on from this and would also seem not be relevant. The toolkit refers to refurbishment or extension work not being allowable but the usual meaning of refurbishment is to renovate and decorate with work such as painting, repairs and cleaning to make the building look new again. The toolkit does not make any mention of inclusion of fixtures and fittings such as carpets within refurbishment.
What am I missing?.
Any help gratefully received.