Readers’ forum: Input tax reclaim

Input tax reclaim

My client is VAT registered as a farmer carrying out traditional arable and livestock activities. There is a farmhouse and various barns on the site.

On the same premises a separate VAT registered entity owns a manor house that is used for weddings and conferences; it includes 15 bedrooms for overnight stays. There are also ten small cottages that are owned by a separate trust and rent out to tenants; this a third entity and not VAT registered.

The local authority has instructed my client to carry out major renovation works on the water system that serves the entire site from a reservoir which includes both groundwork and pipe improvements – it will be carried out by a contractor who will charge my client £100 000 plus VAT.

My question is about VAT and whether my client can fully claim...