A question regarding vat and buildings, help required.

[Gary Birch]

I’m guessing it is owned by a company that is Vat registered. We pay vat on our rent which isn’t an issue as we are vat registered anyway.

I have this vague recollection that most industrial properties we looked at were plus vat

Sorry if stating the obvious

[Colin Crabb]

Looked into this myself a year ago, when looking at a new build:

quote :

3.2 Freehold sales of new or part completed commercial buildings

If you sell the freehold of a new, or partly completed, commercial building your supply is standard-rated unless it qualifies to be treated as part of a transfer of a going concern (see Notice 700/9 Transfer of business as a going concern).

For the purposes of this paragraph a commercial building is any building that is not designed as a dwelling or number of dwellings nor intended for use solely for relevant residential or relevant charitable purposes. For the meaning of these terms, see Notice 708 Buildings and construction. Examples of commercial buildings are shops, factories, warehouses and offices.

A building is new for 3 years from the date that it is completed. The date of completion is the date the certificate of practical completion is issued, or the date the building is fully occupied, whichever happens first. All freehold sales that take place within the 3-year period are standard-rated. However, leasehold sales are exempt (subject to the option to tax – see notice 742A Opting to tax land and buildings).

Hope it helps…. You can ring HMRC and ask questions, there pretty easy going surprisingly!

[Denise Goodfellow]

just incase anyone else is intrested

its called "option to tax"

where you deside you want to pay vat so you can charge it… proberly more for the larger companies who buy their own property…

still got to talk to the accountant