Director of property renovation business. VAT question

Johncarr87

Hi,

I have recently started a property renovation business buying houses (not new build) renovating them and then selling on.
I have just completed my 1st house and will be putting it up for sale in the next few weeks.
I have spent £33k on refurbing it, which possibly £20k i have paid VAT on it..
As this property will sell above the VAT threshold im aware as i may have to register as vat registered.

Can i claim any VAT back on this sort of business for materials and labour? Any guidance or help will be appreciated.

Thanks :T

antrobus

Johncarr87 wrote: »

Hi,

I have recently started a property renovation business buying houses (not new build) renovating them and then selling on.
I have just completed my 1st house and will be putting it up for sale in the next few weeks.
I have spent £33k on refurbing it, which possibly £20k i have paid VAT on it..
As this property will sell above the VAT threshold im aware as i may have to register as vat registered.

Can i claim any VAT back on this sort of business for materials and labour? Any guidance or help will be appreciated.

Thanks :T

As far as I'm aware, the business of buying up existing houses, renovating them, and selling them at a profit is normally an exempt supply. Exempt supplies don't count towards the threshold, and no VAT input reclaim is possible.

MDMD

antrobus wrote: »

As far as I'm aware, the business of buying up existing houses, renovating them, and selling them at a profit is normally an exempt supply. Exempt supplies don't count towards the threshold, and no VAT input reclaim is possible.

As an aside, you can opt to tax some exempt L&B transactions turning it into a standard rated supply. This needs professional advice though. Residential dwellings would remain unaffected by the option so at best it will be a partially exempt supply.

https://www.gov.uk/government/publications/vat-notice-742a-opting-to-tax-land-and-buildings

antrobus

MDMD wrote: »

As an aside, you can opt to tax some exempt L&B transactions turning it into a standard rated supply. This needs professional advice though. Residential dwellings would remain unaffected by the option so at best it will be a partially exempt supply....

The question was asked in relation to a "property renovation business buying houses", so I did rather assume that by 'houses' the OP meant something close to the dictionary definition of 'buildings for human habitation', otherwise known as 'residential dwellings', and therefore the option to tax was not relevant.