HM Revenue and Customs Brief 44/08
Submit Articles Back to Articles
Issued 15 September 2008
VAT: Partial Exemption – VAT adjustments when house builders let their
dwellings before selling them
We have published an Information Sheet 07/08 which provides guidance,
including worked examples, on the VAT implications when house builders decide to
temporarily let their dwellings before selling them.
This Information Sheet is in response to recent enquiries from the house
building sector and takes account of the High Court decision in the joined cases
of Curtis Henderson and Briararch  STC 732 which arose in the early 1990s.
The key points to which the Information Sheet refers are:
- if you temporarily let a dwelling before selling it, you may affect the
VAT you can recover on your costs
- many house builders who temporarily let a dwelling will not be affected
but you need to check this to avoid making VAT mistakes
- there is an easy way to check if you are affected by applying what we
describe here as a ‘simple check for de minimis’
If you fail this check, you may have to:
- adjust the VAT previously recovered on your submitted VAT returns
- restrict the VAT to be recovered on your current and future VAT returns
- both adjust your past VAT recovery and restrict your future VAT recovery.
If you need to adjust VAT previously recovered, exceptionally and if you
prefer, you may be able to do this without contacting us.
Further information can be obtained from our website or through the National
Advice service on Tel 0845 010 9000. Information Sheet 07/08 provides guidance
and further detail is available and supersedes or compliments existing guidance,
About the Author
© Crown Copyright 2008.
A licence is need to reproduce this article and has been republished for
educational / informational purposes only. Article reproduced by permission of
HM Revenue & Customs under the terms of a Click-Use Licence. Tax briefs are
updated regularly and may be out of date at time of reading.
Follow us @Scopulus_News
Article Published/Sorted/Amended on Scopulus 2008-09-20 07:42:12 in Tax Articles