Structuring transactions to minimise VAT

Planning in advance is essential to most activities these days and usually results in the minimum cost and maximum return. Considering the VAT consequences of transactions in advance is equally as important especially in property transactions as failure to take the necessary steps before commencing work can result in significant extra VAT costs later.

For example, failure to get the right planning and listed building consents can result in a extra 17.5% on your bills or failing to exercise the option to tax could prevent recovery of VAT on the purchase of a commercial property in the first place. Whilst sometimes these can be rectified later this is not always the case and can result in substantial additional costs.

Also deciding when to register for VAT and whether you are eligible to use any of the schemes available to small businesses can minimise VAT so again planning ahead even when you first start in business can result in savings.