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Property & VAT

Property & VAT

We work with lots of property developers and contractors who rely on our expertise to guide them through some of the most complicated and crucial tax issues faced by any business, especially when you consider the high value of a property transaction.

There can be a variety of different VAT rates applicable to property development, and work on the same property may have differing liabilities.

The sale of property can cross over a variety of differing liabilities depending on if the property is classified as new for VAT purposes, if it is commercial or residential and what was its previous use. Complications also arise in respect of the recovery of VAT on a development, even if there is only one rate of VAT applicable to the sale.

Property deals also result in a variety of other payments such as option payments, barters, payments for surrender of interests and dilapidation payments, all of which need to be classified correctly to determine the correct VAT position.

One of the most complex areas of VAT and Property are the rules about the transfer of a business as a going concern and if the transaction could be outside the scope of VAT. Getting these transactions wrong can have a major impact on the vendor or the purchaser and may also result in HMRC imposing penalties on top of the VAT error.

In 2021, the new Domestic Reverse Charge will apply to certain construction services and that will affect how VAT is accounted for in the sector as well as having a major cash flow impact for some parts of the sector. There is also the Construction Industry Scheme to master as well as how VAT interacts with SDLT.

You can trust Harwood Hutton to find the path of maximum benefit. We can also advise on funding arrangements for property projects.


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    Client Testimonials
    • I always get quick, clear and definitive responses from the Harwood Hutton tax team – commercial answers to commercial issues.

      Robin Berry – Morgan Management
    • Right from the outset Harwood Hutton gave us direction and great advice – and that advice has evolved over the years as we’ve grown. We’re both medium-sized companies providing a bespoke service – one furniture, one accountancy – and the relationship works.

      Andy McCarron, McCarron and Co
    • I’m deeply impressed with Harwood Hutton’s extensive knowledge of tax arrangements for residential and commercial property landlords.

      Qadeer Ahmed, MD, ABA Finance
    • They really took their time to understand what was important to us and our business and the expertise we required. Whoever we speak to at HH, we get the same fantastic response and technical input. It’s a real partnership.

      Edward Finch, group MD, MRIB insurance brokers
    • I have worked with the directors at Harwood Hutton on a number of mutual client matters over many years. The reassurance of their clear, commercial and focussed advice is one of the main reasons I regard this as one of my most valuable professional relationships.

      Frank Wessely, Partner, Quantuma LLP
    • Harwood Hutton never seem to rest on their laurels. They are always seeking out new avenues and ways to improve their offering. A very forward-thinking company with staff who are always well briefed and who approach each task with drive.

      Karl Austen, MD, Surefoot Communications
    • We have engaged Harwood Hutton in several areas of structuring, including VAT issues, decoupling an SPV from a group structure and HMRC clearance for a transaction. The team have exceeded all expectations by being proactive, measured and very thorough.

      Adam Fawsitt, Director, FHT Limited
    • We moved to Harwood Hutton as they delivered a succinct and professional proposal. If anything, we have been more impressed post-move. They are a fantastic company to work with. They do truly differentiate. They have the skills and capabilities of a mega firm but with a personal service.

      Edward Finch, group MD, MRIB insurance brokers
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