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About 12 months ago my client bought some land with the intention of building new houses which would then be sold. He registered for VAT and has incurred about £30 000 plus VAT in professional fees (mainly architects) which he claimed on his last VAT return.
He has since decided to abort the project and sell the land (VAT exempt) and expects to make a £50 000 profit on the land sale.
Can readers tell me whether my client must pay back the £6 000 input tax that he claimed on the professional fees on his final VAT return before he deregisters?
Query 17 853 – Rob the Builder
Reply from Alex Millar Millar Taxation
Rob’s client has claimed input tax on professional fees at a time when the intention was to make a zero-rated...
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