VAT questions on Commercial Buy-To-Let

vincent.lee

Hello, welcome to my ted talks.
asdasd
asdasd

00ec25

come back and ask for advice on anything you have not understood once you have read the basic facts as you are asking factual questions whose answers are simply a matter of reading this ...

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

System

The sale is VATeable therefore you have no choice but to pay the VAT. You don't get the choice over whether to opt in or not, that is decided by the HMRC deciding the item or service for sale being one that attracts VAT.

You aren't VAT registered so the total price is plus VAT. EVEN IF YOU WERE VAT REGISTERED YOU WOULD HAVE TO PAY VAT AT THE TIME OF PURCHASE. You would then recoupe the VAT you paid against the VAT you charge on your sales, HMRC sending you a cheque if you pay more VAT than you take in a VAT accounting period.

Given the rest of your questions I strongly suggest you do not start this venture until you have learned the basics of how tax works. How VAT works is very simple to understand and if you don't then you shouldn't be in business until you do because if you don't understand that then there are likely to be a whole bucketload of other fundamentals of running a business you have no clue about.

csgohan4

OP consider an accountant if you move forward with it, you will be caught out if you try and do your own tax returns

daveyjp

Ask the vendor for the VAT opt to tax confirmation before agreeing anything as you need evidence they have opted to tax. Mistakes are made.

Also don't forget stamp duty is calculated on the price including VAT so you need to ensure it is correct.

vincent.lee

Tarambor wrote: »

The sale is VATeable therefore you have no choice but to pay the VAT. You don't get the choice over whether to opt in or not, that is decided by the HMRC deciding the item or service for sale being one that attracts VAT.

You aren't VAT registered so the total price is plus VAT. EVEN IF YOU WERE VAT REGISTERED YOU WOULD HAVE TO PAY VAT AT THE TIME OF PURCHASE. You would then recoupe the VAT you paid against the VAT you charge on your sales, HMRC sending you a cheque if you pay more VAT than you take in a VAT accounting period.

Given the rest of your questions I strongly suggest you do not start this venture until you have learned the basics of how tax works. How VAT works is very simple to understand and if you don't then you shouldn't be in business until you do because if you don't understand that then there are likely to be a whole bucketload of other fundamentals of running a business you have no clue about.

Okay, so would I have to be VAT registered at the time of paying VAT, in order to reclaim the VAT paid?

chrismac1

No. But you would need to apply VAT on all your supplies, issuing proper VAT invoices to your tenants. This won't be a problem if they are also VAT registered.


It's also worth saying that HMRC could ask a few questions about this VAT application. There are a lot of tax cases in this area, many of them actually won by HMRC. In fairness one or two did look as if HMRC were up against a bit of a chancer just having a go without much of an idea about VAT.