2014 Budget Impact on VAT Land and Property
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4th April 2014
One of the most complex areas of VAT is the law
applying to land and property transactions and construction/conversion
services. There were no changes to the VAT law for land and property in
2014 budget, however, one of the budget highlights was the Government’s
on funding to improve the infrastructure of the UK including funding
social housing, a new ‘garden city’ on brownfield at Ebbsfleet, and the
of more government owned land for redevelopment. Whilst this does not
immediately shout ‘think VAT’ this is likely to have VAT consequences
number of businesses and entities.
If businesses are providing
construction services relating to the new social housing or buildings
field sites, they may be making zero rate supplies of new build
converting existing commercial properties to residential use (which may
for the reduced rate of VAT) or simply upgrading existing dwellings
attract VAT at the standard rate.
This mix of potential VAT rates
for construction services makes it easy for the supplier of the
either under declare VAT creating an exposure to an assessment for VAT,
penalties and interest, or overcharge VAT at the incorrect rate making
un competitive and also meaning that the suppliers customer will be
recover the VAT charged to it in error.
There are also VAT issues to
consider for recipients of construction and conversion services that
be able to claim VAT charged to them if they use the services acquired
an onward VATable supply, or in the case of private individuals are in
position to make a valid VAT claim under the DIY House Builders scheme.
If you have clients or are a
business that makes or intends to make supplies of construction
will buy in construction services it is always worth calling our free
helpline for a no obligation initial chat to establish if there are any
exposures or missed VAT opportunities.
About the Author
VAT People are leading VAT and Customs Duty
consultants based in the
North West of England. We work with a wide range of businesses
throughout the UK as well as assisting our accountancy colleagues to
unravel the thorny VAT issues for their clients. We are one of the UK's
largest and most comprehensive sources of VAT and Customs advice, our
consultancy team having over 140
years of experience in VAT and Customs
gained in either HMRC or a Big 4 accountancy practice environment.
Call us on our VAT helpline 0800 077 4604 to discuss. All initial discussions are free with no-obligation.
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Article Published/Sorted/Amended on Scopulus 2014-04-08 10:10:22 in Tax Articles