Do the VAT property rules need simplifying?

In May the government launched a call for evidence (tinyurl.com/kjze9ez5) seeking views on whether the VAT rules for land and property need to be simplified.

Currently most supplies of land are exempt from VAT subject in the case of commercial property to the landowner or landlord being able to opt to tax. Some supplies are automatically standard rated such as new commercial buildings or specified typically short-term interests such as holiday or hotel accommodation and car parking. Some supplies in relation to residential property are zero rated.

The call for evidence document is surprisingly short on detail and in the main leaves it to those responding to examine the effect of possible changes. It takes as read that fundamental changes to the legislation are required – seemingly including the removal of the option to tax – to achieve simplicity and certainty...