Savings with Tax Dis-Application

In certain circumstances, businesses can take advantage of the  option of disapplied tax, often in cases where an existing commercial structure is going to be converted into a residential building e.g. a pub due tobe converted into flats.

We have dealt with a variety of cases where tax dis-application has been of assistance :

  1. A client came to us after a vendor they were purchasing a property from added VAT of some £35,000 in the final stages of the process. The premises was an old pub which our client was to convert to new residential for renting out. The VAT charge could not be recovered and in fact should not be charged ,so our advice was that the VAT should not be paid. Depending on the vendor's VAT position this may cause them a VAT loss so our advice is that our client should negotiate – we can offer bespoke advice on this
  2. A client did not realise that the option to tax should have been disapplied to another pub purchase and paid ‘VAT' of £100,000. The vendor has refused to repay this and HMRC will not allow VAT recovery, leaving our client in an unenviable position – our advice again is to take VAT advice  so our advice is take advice early and plan.
  3. Where there are connected parties and one is unable to recover at least 80% of VAT the option to tax may be disapplied. This happened recently for a client of ours that was looking to purchase a property individually and rent to its partly exempt business that could only recover 65% of its VAT. We reviewed the position and secured £250,000 VAT recovery by routing the purchase through the trading company instead.

Sale of Buildings

Always consider the history of the building over the last 10 years, since the sale of a property which is a Capital Goods Scheme item can result in unnecessary repayments of VAT if not dealt with correctly.

Cash Accounting

A very useful scheme for business with a turnover not exceeding £1.35 million  is to declare sales  on a cash received basis, and purchases on a cash paid basis. Doing so effectively gives automatic VAT Bad Debt Relief.

Annual Accounting

A seldom used scheme, but one which is good for expanding businesses as it assists the management of cash flow – we advise annual accounting for any business with turnover over £1.35  million

Flat Rate Scheme

This scheme is useful for businesses with a turnover of less than £150,000as it simplifies VAT and also can make savings.Our advice is it is worth seeing whether using this will achieve actual savings by undertaking a cost/benefit exercise, and we can help with this.

Speak to us

To speak to a member of the team about how to take advantage of tax dis-application, call us now on 0800 077 4604, or fill out an online enquiry form and a member of the team will get back to you.

Latest Testimonials

  • "The Trustees for Methodist Church Purposes have had a close relationship with The VAT People for the past seven years as they have helped to steer us through the complex process of reclaiming overpaid VAT and successfully accomplishing our de-registration from VAT. They have been able to quickly grasp the nature of our organisation and clearly see the arguments needed to persuade HMRC of our case. The VAT People also had the persistence to continue pursuing our claim until a satisfactory outcome.

    Rob McCann has always made time to be available whenever his expertise has been required to explain the ongoing situation to our governing trustees and committees. His helpful nature and ability to understand and explain complicated areas of the law has been appreciated and valued.
    "

    Simon Kevin Speechley - May
  • "Client service is of the utmost importance to us as a firm of Accountants and Business Advisors.

    Having the ability to be able to contact David Miller for immediate advice on VAT and Customs issues ensures that we are able to deliver our efficient tax service successfully and fulfil our client's expectations, especially in circumstances when they ask for guidance on crucial matters which require a tight deadline.

    Having the ability to engage David's service to attend client's HMRC visits has proved invaluable, particularly as David's knowledge is often superior to that of the Officer in attendance!

    David also offers creative planning solutions to problems and is very proactive with advice as soon as any legislation changes are known. We could not offer the same quality of service to our clients without David and his team."

    Annette Stone, Mark Holt and Co - May
  • "Tamara was my first port of call when I needed a VAT expert. She is extremely knowledgeable, dependable, thorough and efficient. I would recommend her personally to any business needing this kind of assistance."

    Sarah Sillars OBE, CEO at Institute of Advanced Motorists, IAM - April
  • "The VAT People have been used by Cosmo Leisure for many years. We have found them to be very thorough and professional in all that they do.
    They have looked after some very complicated tax issues for us, always meeting deadlines at short notice and pursuing successful claims."

    Keith Lee, Cosmo Leisure Group - April
  • "We have used the services of the VAT people for many years and our point of contact is Steve Howard.

    We especially make use of the free help line which is marvellous.

    Steve is fantastic to deal with and he always provides speedy response, excellent answers to our queries and delivers value for money

    We would not hesitate to recommend the company and especially Steve to any of our clients or business colleagues"

    David Finlayson, Finlayson (UK) Limited - April
  • "Tamara has advised a number of our clients on VAT-related matters and her advice has always been timely and relevant. She is also willing to discuss matters on an informal basis and could not be more helpful. I recommend her and her firm whole-heartedly."

    Adam Hymes, Commercial Property Partner at Kuit Steinart Levy LLP - April
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