Land and Property Development
The team of specialists at The VAT People has a great deal of experience in advising businesses on the complicated intricacies of VAT on land and property transactions.
We have helped many companies to ensure these often very high-value transactions are structured correctly from a VAT perspective in order to ensure any eligible savings are made. Due to this experience, we are well-placed to guide your business through this area.
The complicated nature of VAT on land and property transactions means that calculating what you owe can be extremely difficult - but we are here to help.
How we can help you
As with any legal matter pertaining to property development, VAT is a complex issue that should be dealt with correctly and efficiently. Failure to comply with regulations could mean your business is subject to fines from HMRC, while a lack of awareness regarding specific reliefs could mean you are paying more than you need to.
However, The VAT People can help to ensure your business is paying the correct amount of VAT on land and property transactions. Our extensive knowledge means we can also advise on where you may be paying too much VAT, as well as discussing any reliefs available to you.
We have previously assisted businesses with the following:
- Ensuring land and property transactions are structured correctly from a VAT perspective
- Suggesting changes to land and property transactions in order to secure savings - including VAT savings and Stamp Duty Land Tax savings
- Ensuring the transaction achieves its overall commercial objective
We endeavour to examine all avenues to discover what the best outcome is for our clients and offer advice to ensure they are able to achieve that outcome.
Liability of supplies
Land or property transactions can be subject to VAT at different rates. Items can be exempt from VAT, attract VAT at a number of rates or be outside the scope of it altogether. While some of these instances may be similar, they have subtle differences, especially when it comes to the recovery of VAT on related expenditure.
Although no VAT is due when a land or property transaction is designated as exempt, the individual making the supply will be unable to recover the related input tax. In contrast, a transaction that is zero-rated for VAT purposes will not be subject to output tax either, although an input tax recovery may be possible.
Does roofing material qualify for 5% VAT?
The Upper Tier Tribunal allowed HMRC’s appeal against the First-tier Tribunal’s decision that conservatory roofs installed by Pinevale Limited qualified for the reduced rate of VAT as “energy-saving materials” amounting to “insulation for roofs”. The work consisted of a polycarbonate cellular material in aluminium frames that comprised the (insulating) roof of the conservatory, and was claimed to provide significant energy savings when compared to other forms of conservatory roofing.
When installed, it replaced the conventional roof on a new or existing conservatory. The First-tier Tribunal decided that this amounted to ‘insulation for roofs’, but the Upper Tribunal disagreed. The Upper Tribunal preferred a narrower interpretation of the VAT relief and agreed with HMRC’s argument that the term ‘insulation for roofs’ did not extend to the roof itself, whatever its insulating qualities.
HMRC’s appeal against the First-tier Tribunal decision was therefore allowed.
Does the supply of goods and services impact land and property transactions?
Land and property transactions can vary depending on whether they involve the supply of goods or a supply of services. The distinction between these is significant, as they determine when the VAT is due. Any property transaction should be defined in this manner from the outset.
The grant, assignment or surrender of major interest in land or property is classed as the supply of goods, whereas any other land or property-related supply is likely to be regarded as a supply of services.
The basic tax point for services is when the service has been completed. However, there are special rules for any continuous supplies for specific provisions for construction services supplied under contracts providing for staged payments.
There are also anti-avoidance measures relating to staged payments, which can have implications for contracts with longer prevention periods.
How we can help
The VAT People can help to ensure your business is paying the right amount of VAT on land or property transactions. Our extensive knowledge means we can also advise on where you may be paying too much VAT, as well as discussing any reliefs available to you.
Contact us by calling 0161 477 6600, or fill out an online contact form and we will be in touch.
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