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27 November 2023
VAT pitfalls
I have a client planning a property development project and would like to confirm the VAT position. He is buying an old care home to re-develop into nine or ten apartments. Each apartment will meet the conditions of a dwelling specified in HMRC Notice 708. They will be sold on 999-year leases. The care home has been empty and unused since 2018. My client will form a new limited company to buy the property. My questions are as follows:
- Can my client’s new company register for VAT straight away so it can recover input tax on the purchase of the building (if any) and professional fees such as solicitors and architects ie an intending trader registration.
- Will the work carried out by builders be subject to 5% VAT rather than 20%?
- Presumably the sales of the apartments will be zero rated because there have been no dwellings on...
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