Land from LA

I have a client who is about to buy some land from a local authority and will build houses on the land to sell to private individuals.

The local authority is prepared to sell the land for £1 million but has also asked my client to pay £117 500 as a separate payment in relation to professional advice given to the authority by a surveyor on the potential use of the land if it was sold.

This invoice is for £100 000 plus VAT and has not yet been paid by the authority to the surveyor.

My client has asked if it would be acceptable for the surveyor to issue a credit note to the local authority and re-invoice him for the professional services so that he can reclaim VAT of £17 500 as input tax.

Alternatively he has suggested whether another option might be for the...