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VAT reclaim input VAT - commercial to residential

How to recover input VAT on building conversion if not VAT registered business

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Can a non VAT registered business recover input tax suffered on material costs for conversion of commercial to residential property? property has not been lived in for more than 10 years and will be sold once developed.

 

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chips_at_mattersey
By Les Howard
17th Sep 2020 11:24

Register for VAT, as onward sale will be zero-rated. Claim input tax on VAT Returns.

Thanks (2)
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By Del76
17th Sep 2020 11:37

The business main activity is developing residential properties for sale, hence not VAT registered to date. So registering now will not impact on that activity

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Replying to Del76:
Psycho
By Wilson Philips
17th Sep 2020 13:28

What do you mean by “developing” residential properties?

Thanks (1)
Replying to Del76:
RLI
By lionofludesch
17th Sep 2020 13:53

Are you saying that your sales have been hitherto exempt ?

Partial exemption could be an issue. Careful record keeping will definitely be an issue.

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Replying to lionofludesch:
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By Del76
17th Sep 2020 14:05

Yes, all exempt to date as on sale of residential properties.
this is 1st project to convert from commercial to residential and looking to see how/if input VAT can be recovered

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Replying to Del76:
RLI
By lionofludesch
17th Sep 2020 14:19

Yes. You'll need to split up your input tax between the zero rated project, exempt projects and residual.

Have a chat with your accountant about it. In principle, it's easy. In practice, it's more tricky.

Thanks (1)
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By Del76
17th Sep 2020 13:51

Buying residential, renovating/improving then selling as residential

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Ivor Windybottom
By Ivor Windybottom
17th Sep 2020 14:19

Remember that VAT registration is compulsory if over £85k of VAT-able sales, including zero rated, so may as well register now.

Remember to ensure subcontractors only charge reduced rate for conversion work.

Thanks (1)
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By nick farrow
17th Sep 2020 16:40

don't you need an spv?

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Replying to nick farrow:
RLI
By lionofludesch
17th Sep 2020 16:55
Thanks (1)
Replying to lionofludesch:
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By nick farrow
17th Sep 2020 17:26

exactly that one!

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Replying to lionofludesch:
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By nick farrow
17th Sep 2020 17:26

exactly that one!

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