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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4783
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We are tax agents and have a sole trader client who is vat

Customer Question

We are tax agents and have a sole trader client who is vat registered as a builders wholesaler.
Last April he commenced the building of four commercial units and appointed a builder.
Once he received the first builders invoice he proceeded to reclaim the input tax charge on his quarterly vat return which put the business in to an abnormal reclaim position and prompted a vat inspection.The vat inspector disallowed the input tax on the builders invoice since he had not opted to tax the building of the four units.
We proceeded to make an application to opt to tax and sought a retrospective application but only allowed thirty days.
HMRC appear technically correct but how can our client recover the input tax on the earlier invoices issued by the builder?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.
In a word he can't. However, I would be inclined to fight HMRC on this matter as a thirty day limit is manifestly unfair in a trade which has relatively long time spans to complete the works.
I do hope I have shown you a way forward.