Property challenges

VAT queries can sometimes be like the number 37 bus in Manchester: you get none on a particular subject for ages and then three turn up together. In recent months I have dealt with the VAT issues of three different projects where a commercial property has been converted into dwellings and each project had its own twists and quirks with the nation’s favourite tax. I’ll share them in this article.

Basic rules

When advising a client on any residential conversion project there are some basic VAT principles and planning opportunities to consider in each case. Don’t forget that the best VAT outcome is when a final sale is zero rated which gives the ‘win win’ scenario of being able to claim input tax on expenses but with no output tax liability. This is particularly important if a customer cannot claim input tax such as a...