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ARTICLE · 09 JUNE 2008

UK Budget Overview - Changes To VAT Regime

Moore Australia
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As a result of the recent budget the Chancellor announced various and substantial changes to the VAT regime, including a wholesale re-write of the option to tax legislation that will be introduced from 1 June 2008.

United KingdomTax
Robert Facer
Robert Facer
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As a result of the recent budget the Chancellor announced various and substantial changes to the VAT regime, including a wholesale re-write of the option to tax legislation that will be introduced from 1 June 2008.

The option to tax is an important issue for any business with property interests. Supplies of land/buildings which are normally exempt, become taxable when the option to tax is made.

The most common reason for opting to tax is input tax recovery. VAT incurred in making taxable supplies is recoverable, whereas that which is incurred in relation to making exempt supplies is not. Often businesses will opt to tax in order to recover VAT on acquisition/construction/refurbishment costs or professional fees that are incurred on the purchase/sale of a property.

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