VAT partial exemption using a special method.
Discussion
Sometimes the title just pulls in the crowds! Maybe not...
Anyhow, situation is property purchased with option to tax already in place with site containing three separate buildings. Building A provides 100% VAT exempt services. Building B and C to let out at standard rate. B and C also have separate sole use carparks on site.
Therefore in terms of VAT partial exemption and recovery rates the standard method does not work. Income for property A is considerably higher than rental income from B and C. So moving on to special method which is an allocation based on space, which also reflects the site structure within the management accounts. HRMC say can't include parking spaces. I say rent derived from B and C includes the provision of parking therefore they are relevant.
Apologies if this is complicated, (it is for me!). Anyhow, they are not listening and are of course not willing to justify there reasoning at all, except to say it is an opinion. Everything I can find in VAT law generally links the use of land and property based on how that property/land is used. The difference is a recovery rate of 45% or 65% so worth having.
Any ideas on how I can evidence my arguement would be much appreciated.
PS apologies for any technical errors in my wording..
Anyhow, situation is property purchased with option to tax already in place with site containing three separate buildings. Building A provides 100% VAT exempt services. Building B and C to let out at standard rate. B and C also have separate sole use carparks on site.
Therefore in terms of VAT partial exemption and recovery rates the standard method does not work. Income for property A is considerably higher than rental income from B and C. So moving on to special method which is an allocation based on space, which also reflects the site structure within the management accounts. HRMC say can't include parking spaces. I say rent derived from B and C includes the provision of parking therefore they are relevant.
Apologies if this is complicated, (it is for me!). Anyhow, they are not listening and are of course not willing to justify there reasoning at all, except to say it is an opinion. Everything I can find in VAT law generally links the use of land and property based on how that property/land is used. The difference is a recovery rate of 45% or 65% so worth having.
Any ideas on how I can evidence my arguement would be much appreciated.
PS apologies for any technical errors in my wording..
Eric Mc said:
I presume you have an accountant who is well versed on the intricacies of VAT and property?
The well versed accountant is me.... to an extent. I have got a specialist looking into this and I've had a look at the VAT manuals but nothing conclusive that I've spotted, just several salient examples not 100% linked to what I'm dealing with that kind of support my arguement.Gassing Station | Business | Top of Page | What's New | My Stuff