Goods or services?

Request to amend date of VAT registration

In 2008 the taxpayer began building a commercial property. It ran out of funding so sold the property which was 90% complete in early 2012. The sale was standard rated because it was non-residential and less than three years old.

The company submitted an application for VAT registration in December 2011 to be effective retrospectively from 31 March 2011. The director expected this would enable all pre-registration input tax to be recovered on costs incurred since 2007 (reg 111 of the 1995 VAT Regulations). However because the cost of construction services and materials provided by builders are treated as services only the six-month window applies. Businesses have up to four years to reclaim the VAT on goods. As a result HMRC reduced the input tax of £121 833 claimed on the February 2012 VAT return to £1 578.