Readers’ forum: Can VAT be claimed on chapel conversion into holiday let?

One of my clients inherited some land and buildings and has obtained planning permission to convert a chapel on the estate into a holiday let cottage. He will spend £300 000 on the conversion and renovation works and then let it out for £300 a night. The lettings will not take place for another two years.

Will builders charge him 5% VAT as this is converting a non-residential building into a residential property? And will he be able to register for VAT as a sole trader in order to claim input tax on the £300 000 of construction costs and professional fees? Or will it be better to claim VAT under the DIY scheme as this is a property that he inherited as a private individual?

Query 20 034 – Mansion Man.

The DIY housebuilders scheme is not available in this case.

There are plenty of tribunal disputes in which...