VAT on property

FORTHCOMING CHANGE: HMRC published a call for evidence, ‘Simplifying the VAT Land Exemption’, in May 2021, inviting comments on some radical suggestions for the future scope of the exemption. These included making all ‘short-term or minor’ interests in land subject to VAT, or removing the current ‘option to tax’ rules and instead making all land transactions VATable, subject to specific exemptions such as for property with a residential or charitable purpose. These proposals were not generally well-received, but might indicate some more specific, and perhaps appropriate, changes which HMRC might seek to pursue in the near future. The call for evidence ran from 12 May 2021 to 3 August 2021. A summary of responses was published on Tax Administration and Maintenance Day on 30 November 2021 which confirmed that the government did not intend at that time to take any further action regarding the proposals previously discounted by the Office of Tax Simplification but intended to have further discussions with stakeholders on the issues commencing in 2022. For more information, see News Analysis: Views on HMRC’s proposals to simplify VAT land exemption rules and