House builders could face VAT hit
HM Revenue and Customs (HMRC) have warned that any house builders unable to sell their new properties could face a high tax bill if they rent them out.
HMRC has published guidelines stating that developers may have to pay back any reclaimed VAT due to the different treatment of the tax on selling and letting properties.
Although there are exemptions for small amounts of tax involving temporary lets, many house builders are expected to be affected as the trigger for repayment is the intention to rent.
