VAT Blog
Latest news, thoughts and articles from the world of VAT.
Renovations and proving the 2 year “empty house” condition
Over the past few months, I've received a number of queries about property renovations and proving the 2 year "empty house" condition. This is the rule that says a dwelling must have been unoccupied for at least 2 years, before contractors can charge the 5% reduced...
Reverse charge for construction services delayed until 2020
See HMRC R&C Brief 2020 which explains why http://tinyurl.com/y4t2gq3l
Yes please, say thank you!
This is a very quick post to make a very simple point. Every week, I answer queries, free of charge, from all sorts of people, both businesses and private individuals. So even if the query is quite complicated, if I can deal with it in an initial telephone call or...
The TOMS and serviced accommodation
VAT is a major issue for the SA sector, with many small operators trading in a very tight market. But could SA operators who operate from leased properties save VAT if their business falls within the TOMS? The VAT issues involved are complex and you need to know how...
Property developers, VAT and residential conversions
In the past few months, I've had queries from a couple of developers about claiming VAT on costs. In both cases, the developers have converted old residential homes into apartments, selling or intending to sell long leases in the newly converted apartments. They...
What’s the real VAT cost of a property development?
If you want to avoid mistakes and unexpected VAT bills, you need to do the VAT planning for your development as part of the initial financial planning for the project. It might seem obvious that the VAT cost of a development is the difference between the VAT you pay...
Renovations and the confusion about the 5% VAT rate
The most common misunderstanding about VAT and renovations is when you can get the 5% reduced rate. So I thought that I'd try to clear up the confusion. The basic rule is: If you are purchasing goods only, the retailer has to charge 20% VAT. That's it. And no, you...
When is it VAT planning and when is it fraud?
I'm often asked if it's okay to "do it this way" to avoid a VAT liability. More recently, a potential client with a potential £80k liability said "I'll pay you if you can find a way out of this VAT cost". This was not a grey area - the company had simply not...
February 2019 Not another VAT newsletter
We're all in Brexit preparation mode at present and HMRC has issued updated guidance for a no-deal Brexit as well as sending letters to those businesses who trade only with EC suppliers and customers. As always, keep an eye out for information that is relevant to you...
See HMRC’s guidance for a “no-deal” Brexit
Check out the information on HMRC's no-deal Brexit page for detailed guidance about how things will work from 1 April if we leave the EC without a deal.
VAT and flipping dwellings
VAT and flipping dwellings One of the most common types of property developing is the practice of “flipping”; i.e. buying an existing dwelling, typically a house, renovating it and selling it. Very often these deals are done within a relatively short timescale,...
2019, VAT, Brexit and all that…
2019: VAT, Brexit and all that…. Well, here we are back again with Brexit on the news all the time And in typical British style, it’s beginning to feel like a Monty Python sketch or at least a real, honest to goodness, British farce. HMRC has issued some guidance and...
It’s getting to that “management charges” time of year again…….
VAT and management charges and why it’s a lot more important than you’d think…..
Additional REsources
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Not another VAT newsletter; September 2020
Hi there Lots of everyday VAT issues this month. Stamp duty and VAT: Revenue & Customs Brief 20/11 https://tinyurl.com/y32bdmzb contains guidance for landlords when the terms for leases with existing clients are varied. Very helpful guidance at this time when...
What do you do when HMRC gets it wrong?
I'm sure that most of us have received a decision from HMRC about tax that we feel is wrong. You may think that a similar business is paying less VAT, or you may disagree with HMRC’s interpretation of the rules; or in some cases you feel that they have just given you...
VAT and the reduced rate for residential renovations
The most common query I receive about VAT and residential renovations is if/how you, as the property owner, get the 5% reduction for goods and materials. Unfortunately, you can't. This is because the 5% ONLY applies to goods and materials that are supplied and...