Value Added Tax

Buildings and construction ― apportionment of supplies

Produced by Tolley
  • 22 Dec 2021 18:48

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Buildings and construction ― apportionment of supplies
  • When do issues of apportionment need to be considered?
  • How to treat works to the fabric of a building?
  • How to treat communal areas?
  • How to treat live-work units?

Buildings and construction ― apportionment of supplies

This guidance note provides an overview of issues of apportionment in relation to buildings and construction. For apportionment more broadly, see the Multiple supplies ― output tax apportionment guidance note.

For in-depth commentary on legislation and case law around apportionment in the context of relief for buildings and construction, see De Voil Indirect Tax Service V4.231–V4.242. For apportionment of consideration generally, see De Voil Indirect Tax Service V3.156.

When do issues of apportionment need to be considered?

Sometimes when a building is being constructed or converted, part of the works will qualify for relief and part will not. Likewise, sometimes when selling the freehold or granting a long lease in a building, part of the sale or grant will be zero-rated and part will not be. In these circumstances, it can be necessary to perform an apportionment between those elements which qualify for relief and those which do not (ie the ‘qualifying’ and ‘non-qualifying’ parts). Because of the

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