VAT Property Solutions
Note: 51
Where buildings are let prior to first sale and there is no partial exemption method currently in place then a simple check is possible. The house builder must calculate the amount of time (up to 10 years) from construction that it intends to let the building prior to sale and apportion the input VAT recovered accordingly. Provided that the exempt input tax does not exceed £7,500 in any 12 months and is not greater than 50% of total input tax, the house builder is de minimis and can recover VAT in full. If it exceeds this, then it is partly exempt and may have to adjust VAT previously recovered and restrict future VAT recovery. Contact 4 Eyes Ltd if having used the test above you believe that you are or will become partly exempt. (See Clawback adjustment, Capital Goods Scheme and Notes 52 & 53. See also Payback adjustment where instead of exempt letting the building is immediately sold or a long lease is granted).
Contact: info@4eyesltd.co.uk Telephone: Phillip Henwood - 0044 (0)7793 707 839
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