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bigduckontax
bigduckontax, Accountant
Category: Tax
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I'm in the process of buying a commercial building which

Customer Question

Hi,
I'm in the process of buying a commercial building which will be converted into 2 units. We will live in one and possibly rent the other out. We have served the seller with HMRC form 1614D but they are trying to charge us VAT on the 1/2 which we will not live in.
Is this allowed and if I do pay the money can we reclaim it is as part of our recalim at the end of conversion works?
Submitted: 23 days ago.
Category: Tax
Expert:  bigduckontax replied 23 days ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

If the seller has been charging VAT on rentals then they must charge VAT on sales invoice. If you are registered for VAT then it becomes input tax which can be reclaimed on the quarterly invoice in the normal manner.

I do hope that you have found my reply of assistance.

Customer: replied 23 days ago.
I am a private individual who is not vat registered
Expert:  bigduckontax replied 23 days ago.

Then the VAT charged forms part of your purchase cost. However, I would be inclined to check if the application of VAT on a premises sale is actually correct and challenge the seller's invoice.