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Property owner who deregistered for VAT after flat rate scheme changes.
I have a client who has scored a big own goal by deregistering for VAT on 31 March 2017 even though he owns a freehold property that he rents out to tenants with an option to tax election in place.
As I understand it he should have accounted for output tax on his final VAT return based on the market value of the property on 31 March – is that correct? He paid £600 000 plus VAT for the property in 2007 and in 2012 spent £260 000 plus VAT on a major extension to the building – does this mean that deregistration also created an issue with the capital goods scheme? The rental income is £80 000 a year which is below the deregistration threshold.
He deregistered because the flat rate scheme changes would have meant he became a limited cost trader from 1 April 2017...
