Readers' forum: Best of both worlds

My client has recently converted some barns he owns into six cottages all of which qualify as dwellings. He started the work in June 2017 and the project is now nearing completion. His original intention was to rent out the six properties and therefore he did not register for VAT. However he has now decided to rent out two of the cottages as holiday lets through Airbnb with expected annual income of £6 000 per cottage. He also plans to sell one of the other freehold cottages.

He has now asked whether he can register for VAT and claim half of the input tax retrospectively on the building materials professional fees and builder services relevant to the project (the builder services have been charged at 5% VAT).

Somewhat cheekily he has also asked if he can deregister once he has submitted one VAT return and claimed all...