Tax experts are advising property developers to stand up to HM Revenue and Customs after it put forward 'Ludicrous' arguments at an appeal tribunal. Private individuals can claim back VAT on most materials purchased for building a house or converting a non-residential property into a house. In the case of Dr Robert Nicholson, a barn and outbuildings were converted into a house and annexe. In this type of transaction, VAT can be reclaimed when the house is finished. However, in this case, Dr Nicholson had received incorrect decisions from HMRC stating that VAT was chargeable on some of the work when it should have been zero-rated. When he tried to reclaim the VAT he was told that his claim was now 'out of time'.
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