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bigduckontax, Accountant
Category: Tax
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Carrying on from where we left on in regards vat to buying

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Carrying on from where we left on in regards ***** ***** buying commercial property.
would I be right to think that
1. become vat registered and reclaim the vat on the purchase of the property.
2. going forward charge any commercial rent from that property vat on top.
3. do not charge vat on any other commercial property.
have I got that right

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

1. Yes, you could, but beware, as rentals are exempt from VAT then a large proportion of your outputs will be exempt so the proportion of input tax you can reclaim will be depressed by the quantity of of exempt outputs. That is why I told you that the game was not worth the candle.

2. You can do that, but the proportion of standard rated and exempt outputs will still squeeze the proportion of input tax you can reclaim.

3. Yes, but that, of course, increases the element of exempt outputs possibly further restricting the input tax available to reclaim.

Finally remember that on any property you have elected to charge VAT on rentals when you sell you will have to charge VAT on the selling price.

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Thank you for your support.