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Readers' forum : Is backdating best?

14 March 2017
Issue: 4591 / Categories: Forum & Feedback

Can an option to tax be backdated to recover input tax incurred previously?

My client owns a commercial property that she rented out for many years. The rent was exempt from VAT because she had never opted to tax this property. This was despite her being VAT-registered because she owns other properties where an election to tax has been made.

In April 2016 a longstanding tenant moved out of the building and my client spent money improving the property with a view to selling it. A substantial amount of VAT was paid on builders’ invoices and professional fees. However for some reason she did not opt to tax the property until August 2016. The sale completed in December 2016 and she charged VAT on the freehold disposal. The property had been empty between April and December.

My query concerns the input tax incurred on building work between April and August 2016. Can this be claimed because it relates to the...

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