The VAT legislation relating to construction projects and property transactions has evolved into a highly complex system and a sound knowledge of the interaction and impact of numerous rules is required to avoid the risk of costly errors. The law has been subject to many changes made by HM Revenue & Customs to counter avoidance and must be interpreted in the light of the decisions of the VAT Tribunal and the European Court of Justice.
Residential and some charitable buildings benefit from zero-rating and a reduced rate can apply to certain renovation and conversion projects. The supply of other construction services will generally be standard rated.
Commercial property can be exempt from VAT or standard rated. The decision to opt to tax the property will enable a vendor or landlord to recover input VAT. In other circumstances, it is the use or intended use of the property that will determine the extent to which input VAT may be reclaimed.
We have the ability to provide the full range of advice on any issue relating to VAT.
For more information please contact Paul Farey.