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Disadvantages of recovering input VAT on construction of camping site facilities.
Our new clients purchased some land obtained planning permission and are now establishing a holiday camping site.
The most expensive outlay in this project is the construction of a new toilet and shower block which is estimated to cost about £150 000 plus VAT. Needless to say the clients have been asking whether there is any way to recover the £30 000 VAT.
If the clients were to register the business for VAT as from six months ago I presume they could recover all of the input tax. However my question would be whether the business will then have to remain VAT-registered for a specific period to avoid a clawback.
The owners intend to sell the business after about five years’ trading. It is estimated that the turnover will be about £40 000 a year and there would be minimal input tax on an ongoing...
