I act for a client who has recently purchased land from a farmer for £5m – his intention is to build houses on the land and sell them. No VAT was charged on the land sale.
My client has gained an unexpected windfall – there are some pig cabinets on the land which my client will be able to sell at an auction for a six-figure sum. However I am getting conflicting advice about VAT. My view is that pig cabinets are standard rated – unless exported – but our tax partner says that no VAT will be payable on the sales because no input tax was claimed by my client when they were purchased. And then another colleague says that we should work out a ‘cost price’ for the cabinets – using any method that is fair and reasonable – and then pay some output tax with...
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