Commentary

V16.938 VAT—partial exemption – VAT adjustments when house builders let their dwellings before selling them

Part V16 Forms and other HMRC material

V16.938 VAT—partial exemption – VAT adjustments when house builders let their dwellings before selling them

V16.938 VAT—partial exemption – VAT adjustments when house builders let their dwellings before selling them

Information Sheet 7/08, September 2008

1 Introduction

Who should read this information sheet?

This information sheet will be of interest to house builders and their advisers.

What is this information sheet about?

This information sheet sets out HM Revenue & Customs (HMRC) policy on the VAT implications when house builders decide to temporarily let their dwellings before selling them. Key points to note are:

  1.  

    —     If you temporarily let a dwelling before selling it then you may affect the VAT you can recover on your costs.

  2.  

    —     Many house builders who temporarily let a dwelling will not be affected but you need to check this to avoid making VAT mistakes.

  3.  

    —     There is an easy way to check if you are affected by applying what we describe here as a “simple check for de minimis”.

  4.  

    —     If you fail the “simple check for de minimis” then you may have to:

  5.  
    1.  

      —     adjust the VAT previously recovered on your submitted VAT returns

    2.  

      —     restrict the VAT to be recovered on your current and future VAT returns

    3.  

      —     both adjust your past VAT recovery and restrict your future VAT recovery

  6.  

    —     If you need to adjust VAT previously recovered, then exceptionally and if you prefer, you may be able to do this without contacting HMRC.

Why has this information sheet been issued?

This information sheet is in response to recent enquiries from the house building sector and takes account of the High Court

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial