About four years ago, I read an article in Homebuilding & Renovating magazine about paying VAT at only 5 per cent on materials and services when renovating a property which has been unoccupied for over two years. We had bought a bungalow in a nice location which had indeed been unoccupied for that period, and by the time we recieved planning permission to extend it , that period had become over three years.
None of our suppliers were prepared to charge us only 5 per cent VAT because of the hassle involved. For this reason, half way through the project,I decided to try to reclaim the 15 per cent through my own VAT registration.The the VAT on materials used at that point amounted to ca.£16000 so I submitted a claim for a refund of ca.£12000.
That was back in August 2013. As a direct result of my claim I was paid a visit by the VAT inspector.I was told after the inspector had chacked the rules that my claim was invalid. Subsequently,I was fined £1800 for my mistake. Now that we have reached the end of this tortuous project I have read that HMRC have changed the rules so that VAT concessions only apply if your property has been empty for a minimum pf 10 years.
Can someone recommend anyone who can help us in this totally one-sided fight?