VAT

Treasury plans to increase the rate of VAT to 17.5 per cent at the end of the year appear certain to go ahead.

HM Revenue and Customs (HMRC) is facing £8.5 billion in claims for overpaid VAT.

Under certain circumstances, an option to tax is disapplied if the person occupying the relevant property does not intend to use it predominantly for taxable purposes.

Where dwellings are to be built on bare land, it is common practice for completion to take place once a meaningful start has been made on the construction.

The VAT extra statutory concession 3.29, which allows charities to ignore small amounts of non-qualifying use (up to 10 per cent) when deciding whether the construction of a new building qualifies for zero-rating, is being phased out.

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