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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4972
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have started a company that renovates distressed properties

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Hi, I have started a company that renovates distressed properties in the UK. In the main they have been vacant for a few years, all require major refurbishment,roof, electrics, plumbing, kitchen, windows. They do not have a change of use and are all residential .I need some advise in regards ***** ***** the VAT paid, I am VAT registered.
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question.I am providing you with a link that outlines work relating to renovation or alteration of empty residential premises that can be charged at reduced rate of 5% instead of standard rate of 20% (Sec 8 of VAT Notice 708).https://www.gov.uk/government/publications/vat-notice-708-buildings-and-construction/vat-notice-708-buildings-and-construction#reduced-rating-the-renovation-or-alteration-of-empty-residential-premisesAs far as VAT paid for your supplies, you claim VAT paid. This is covered in Sec 11.3 of the above VAT Notice. I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 1 year ago.
Dear Expert, Thank you for getting back to me i have read "11.3 Input tax: does everything i do in the course of the renovations qualify under the wording "provided they relate to taxable supplies" does it make any difference if the properties were not empty prior to my purchase, even in this situation they always require total renovation, of course when the residential properties have been refurbished and sold on, the estate agent or me do not charge the buyer VAT
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.Input tax is claimed on all taxable inputs in the course of your business.. whether the property is empty or not.There is no VAT on sale of residential properties.Agent's fee is a taxable supply for service and would carry VAT at standard rate. I hope this is helpful and answers your question.
Customer: replied 1 year ago.
Dear Expert,Thank you again for your reply, just want to confirm so that I can claim back the VAT building materials from my suppliers. Do the works need to be a set level i.e. if I am just re painting the property and adding a new kitchen or dose it have to be as I set out in my first email major refurbishment,roof, electrics, plumbing, kitchen, windows?Also with my agents fee and that standard rate of VAT they add can this be re claimed?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply. You can claim VAT on your materials from your suppliers. It can relate to any work you have undertaken and not necessarily to do with full renovations. You can also claim back VAT charged by the agent in full. I hope this is helpful.
Customer: replied 1 year ago.
Dear Expert,Thank you again for your time.Just to make sure I am clear in your first reply you say " I am providing you with a link that outlines work relating to renovation or alteration of empty residential premises that can be charged at reduced rate of 5% instead of standard rate of 20% (Sec 8 of VAT Notice 708)."To confirm you are talking about building contractors and trade mens? and its is spertate issues to my suppliers?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply Your original question was“Hi, I have started a company that renovates distressed properties in the UK. In the main they have been vacant for a few years, all require major refurbishment, roof, electrics, plumbing, kitchen, windows. They do not have a change of use and are all residential .I need some advise in regards ***** ***** the VAT paid, I am VAT registered.” In your last posting you state“Just to make sure I am clear in your first reply you say" I am providing you with a link that outlines work relating to renovation or alteration of empty residential premises that can be charged at reduced rateof 5% instead of standard rate of 20% (Sec 8 of VAT Notice 708)."To confirm you are talking about building contractors and trade mens? and itsis spertate issues to my suppliers?” Sec 8 of VAT Notice 708 covers conditions when you can charge your customers VAT at reduced rate. These are highlighted under 8.1.2. Services that are charged at standard rate are covered under 8.4. If you are undertaking work that is deemed normal e.g.painting, replacement of kitchen units only, fitting a new bathroom on its own etc. etc. then you charge VAT at standard rate. Your suppliers will charge you VAT at standard rate on your purchases. I am not clear what you mean by “To confirm you aretalking about building contractors and trade mens? and its is spertate issuesto my suppliers?” Unless you are undertaking a full renovation that meetsthe conditions set out in 8.1.2 your suppliers would charge you VAT at standard rate and you will reclaim that on your VAT returns. I hope this is helpful.
Customer: replied 1 year ago.
Thank you again for your reply.I need to go back a step.I don't charge customers as I don't have any.My company buy's properties that then renovates and then sell on at a profit, well I hope that will happen. To do this the company uses building contractors and trade mens. My company buy 90% of its own supplies. Does this change anything to your past answers?The properties that the company buys all require major refurbishment,roof, electrics, plumbing, kitchen, windows. And some will have been vacant for a few years.What I am trying to find out can the company re claims the VAT on its supplies and the VAT that the building contractors charge?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question..As you are VAT registered the answer is YES. You can claim VAT on your supplies and any charged by the building contractors. I hope this is helpful
Customer: replied 1 year ago.
Thank you again for you time, reason I ask is that someone told me that to be able to re claim the VAT its needs to be major works such as turning a large building into flats as HMRC as does like property developers or investors re claiming VAT. Any thoughts on how I can reply to this?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.There is nothing in VAT Notice 708 that precludes you from claiming VAT on your supplies whether it relates to work done for you by contractors or you have bought materials.. Your business is buying empty properties, renovation of residential properties and resale of them.You are property trader and not investor. I hope this is helpful.If there are no more issues, I will appreciate if you would kindly rate myservice/accept the service I have provided before you leave the site, to ensure I get credited for it by Just Answer.
Customer: replied 1 year ago.
Thank you for coming back to me with the answers, I will rate you but I have some more questions to which I will email you after xmas. Thank you for your time
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.Season's greetings and best wishes.
Expert:  taxadvisor.uk replied 1 year ago.
I have answered all your questions.I will appreciate if you would kindly rate my service/accept the service I have provided before you leave the site, to ensure I get credited for it by Just Answer. Many thanks
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Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.
Best wishes.

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