1614D form to remove VAT from commercial building purchases


Simon Misiewicz

30th January 2016

Are you looking to buy a commercial building?

Do you know if you have to pay 20% VAT?

The problem – 20% VAT on commercial buildings

There are going to be times when you look to buy a commercial building and convert it into residential dwellings. The sad fact is that you may have to pay 20% VAT but you may not be made aware of this until you start the purchase process. The reason for this is that many companies assume that you know VAT will be charged and that you will claim it back.

As you should be aware, rental activities are exempt from VAT so any VAT that is added on to the purchase of your commercial building is going to hurt your return on investment (ROI).

As such you will need to ask the seller to complete a 1614D form to disapply VAT from commercial buildings. That way they do not charge you VAT at all on the sale.

You may also be able to claim 100% of the VAT back that you have paid on your development costs if you are converting to sell. If you are not looking to sell and wish to keep the properties in your portfolio then you can still reduce the VAT to 5% if you are converting commercial buildings to residential.

Next steps – reduce VAT and tax on your properties

If you want to understand how to implement this strategy or to discuss other finance/tax questions then please book some time with us using the below calendar:

If you are looking for a new accountant then please book some time with us using the below calendar. Please note that this booking is to describe our services and will not be used to discuss your personal tax affairs.

Book a call to see how we can help you.