Sole trader buying commercial property
I have a client interested in buying a commercial property for his business and he is not VAT registered. The cost will incur VAT so what happens to this VAT he pays? Can he offset the cost of the commercial property including VAT against his income tax self assessment? What about claiming legal fees and other costs, are these allowable?
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Comments
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It will certainly have nothing to do with Income tax, you need to look at capital expenditure!0
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@Finchy01 In simple terms the VATman will keep it. For accountancy purposes the VAT will become part of the overall cost of the property as it will be irrecoverable along with the legal fees etc. Unless, of course, your client chooses to register for VAT.
It will however, as @douglasstroud mentions above, be capital expenditure and it is not recoverable from self assessment income tax.0
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