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Any VAT experts about?

24 replies

KatyMac · 04/04/2008 08:22

I have a very complicated VAT query

I am building a nursery

Do I pay VAT on the conversion/build?

Builder thinks they charge zero rate - but I can't see it myself

Any ideas

(I am on hold to them atm - but not holding out much hope)

OP posts:
fym · 04/04/2008 08:26

on private property new build is zero rated and renovation is normal VAT but not sure about businesses....

On the business front I am VAT registered and reclaim all VAT paid so i think if you are VAT registered as a business you would just reclaim the VAT anyway.....

KatyMac · 04/04/2008 08:29

I can't be VAT registered childcare is exempt (not zero - that's different)

OP posts:
Eddas · 04/04/2008 08:44

a question for the vat office really. It's not a straight forward question.

Don't expect to get an answer from them quickly get them to put it in writing to you.

KatyMac · 04/04/2008 12:17

Well apparently they have to charge me 17.5% Bummer

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KatyMac · 04/04/2008 21:00

Bump in case anyone knows if there is a loophole

OP posts:
LaComtesse · 04/04/2008 21:02

I think you pay VAT on the newbuild bit but not on a conversion - it's something to do with capital and revenue expenditure. Hopefully someone more clued up will come along soon.

DiscoDizzy · 04/04/2008 21:08

DH says his understanding is that you don't pay VAT on a new build but you do on a conversion.

KatyMac · 04/04/2008 21:11

It's a converion
The builders have to charge VAT

It's going to be a nursery
Which is VAT exempt - so I can't charge VAT (yay say the parents) but you can't claim it back (NOOOOOOOO says Katymac)

If I can't 'lose' the VAT I can't open the nursery.

OP posts:
DiscoDizzy · 04/04/2008 21:13

DH suggests you take advice from your accountant.

Sounds very confusing to me. Good luck

KatyMac · 04/04/2008 21:16

I know

But MN is cheaper (& usually more accurate)

OP posts:
DiscoDizzy · 04/04/2008 21:18

Try posting on here i've usually found it a good website for this sort of query.

Eddas · 04/04/2008 22:12

I can look at some books at work on monday if you like, mind you, you'll be subjecting me to the dullest reading material in history (am an accountant, well sort of) and we deal with some building companies so someone's bound to know the answer

ChirpyGirl · 04/04/2008 22:23

A new build residential property is charged at 0%. A new commerical property at 17.5% but then they claim it back on their VAT return so no loss.

Unfortunately, as you know, childcare is exempt so you can't be VAT registered, so you can't claim the VAT back. If it was a conversion then it would still be standard rated (17.5%) as it is not residential, the zero rate is only there for dwellings (ie houses) not businesses.

If you want more detail or info try 0845 010 9000 as this is VAT advice line

ChirpyGirl · 04/04/2008 22:28

Have just realised this is who you were probably on hold to, in which case whoever you spoke to was certainly not trained by me, this should not be a remotely hard question for a VAT officer!

KatyMac · 04/04/2008 22:32

When I got through he wasn't even sure that

  1. I was exempt
  2. that childcare wasn't zero rated

    But he did know all about buildings stuff
OP posts:
KatyMac · 04/04/2008 22:34

Chirpygirl - how about my other idea here

I guess that's a no go-er as well

OP posts:
ChirpyGirl · 04/04/2008 22:44

Yeah, sorry, nogo, have posted on other thread.

Tut, what are they teaching them! You know when you call and they speak to a 'supervisor'? That would have been me, so I know my shit. (oh yeah, even after 2 kids)

KatyMac · 04/04/2008 22:47

I suggested he found a supervisor - he didn't think he could - they were busy on the loo I think

OP posts:
KatyMac · 04/04/2008 22:49

It is silly a property development company could develop it and charge me VAT on the rent & claim back what it cost them to do it

But because I am a nursery I can't

S'NOT FAIR [pout]

OP posts:
Candlewax · 04/04/2008 22:54


A little sneaky suggestion. I work for a firm of Chartered Accountants. They give the first interview with a client for free.

Can you not go to ANY firm of accountants and pretend to discuss all this with them? Pretend you want them to do your books etc?

You could then get brilliant advice for nothing.

ChirpyGirl · 04/04/2008 22:54

No, it isn't fair, and I'm not going to argue

PArt of my job was to tell people that the governemtn was buggering them up untintentionally by putting these laws into place to stop major VAT fraud by companies that wouldn't even miss it and then small businesses get fucked over because of it.

Feel free to stamp your feet as well.

(I could go into the fact that rental is also normally exempt and companies have to do a thing called opting to tax to allow them to charge VAT on it, and therefore claim it back, but I won't)

pickie · 04/04/2008 22:57

or go to businesslink who have financial advisors (the one I had was a chartered accountant) and it is absolutely FREE!!

Remotew · 04/04/2008 23:00

It sounds really complicated. There is also a scheme called self build where you can register just to claim the VAT back on building.

It might be beneficial to employ builders that are not registered for VAT, therefore no charge to you for VAT at all.

Sorry if this info is useless.

ChirpyGirl · 05/04/2008 20:09

the self build thing is again only for private residential properies. I think a non VAT registered builder might be a way to go...but that means hiring a very small firm as their turnover would have to be quite low not to be registered for VAT. (and registering below this level is voluntary so most do it to claim back their VAt anyway)

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