House builders renting properties could face VAT clawback from HRMC
House builders hoping to beat the credit crunch could face big VAT bills under guidance published by HM Revenue & Customs (HMRC).
The guidance warns that house builders renting out properties may have to pay back VAT they have reclaimed because VAT on selling and renting properties differs.
The guidance says that if a property is rented before it is sold this may affect the amount of VAT a house builder can claim back in costs. HMRC says many house builders won't be affected but they need to check carefully in case they are.
