The VAT treatment of land and property is one of the most complex areas of the VAT legislation. One of the related HMRC notices entitled, Buildings and Construction (Notice 708) has recently been updated. The notice has been updated to clarify that a dwelling can consist of more than one building.
The notice explains:
- When building work can be zero-rated or reduced-rated at 5%.
- When building materials can be zero-rated or reduced-rated at 5%.
- When the sale, or long lease, in a building is zero-rated.
- When developers are ‘blocked’ from deducting input tax on goods that are not building materials.
- When a builder or developer needs to have a certificate from his customer, confirming that the building concerned is intended to be used for a purpose that attracts the zero or reduced rate.
- When a customer can issue that certificate to a builder or developer.
- What happens when a certificated building is no longer used for the purpose that attracted the zero rate, the use for that purpose decreases or the building is disposed of.
- The special time of supply rules for builders.
- When a business, when using its own labour to carry out building work on a building or civil engineering structure that it occupies or uses, must account for a self-supply charge.
We have a wealth of tax and accounting experience when it comes to land and property transactions, so please do not hesitate to contact us.