Readers' forum: Barn conversion

My client bought a barn and will convert it into two flats for holiday lettings. I have been advised that the client can register for VAT and claim back all of the input tax on the conversion costs (on the basis that holiday lettings are taxable) by registering on a voluntary basis and as an intending trader. However the adviser then said that as soon as the project was completed and before any guests rented the flats my client could deregister because his expected sales would be less than £80 000 in the next 12 months. This would be without an input tax clawback because there was a deemed “zero-rated” sale of the flats. The conversion costs will be £200 000 which is less than the capital goods scheme limit.

The proposal seems too good to be true. Are my concerns justified?

Query 18 677– Convertor...