Just a quick post before I crack open a beer and enjoy what is left of the sunshine.
My client (same one as I posted about transfer of VAT number) has won this big building job, the job is for a property developer and involves converting a commercial building into residential, my understanding is that the services and materials that my client supplies direct to the property developer will be at the reduced rate of 5%.
Just wanted to know if there is any proof/paperwork needed to show that it is a qualifying conversion, I know certificates of use are needed in other circumstances but I did not think that one was needed in this instance.
Just to complicate it bit more the flats are going to be rented and not sold so am I right in thinking that because the rental income will be exempt the input tax for the property developer is not recoverable but my client will still charge VAT at the reduced rate.
Any advice greatly appreciated
Cheers
__________________
Doug
These are only my opinions of how I see things and therefore should not be taken as advice
There is no formal VAT certification for a conversion to dwellings. But you should hold commercial evidence that the property was commercial, that there is Planning Permission (or similar) for the conversion, and the resulting use as dwellings.
Since the flats will be let, input tax is not recoverable. But at least you have reduced the irrecoverable VAT from 20%!
