Saving a client from a very big bar bill.
What happens when you engage experts? You get professional advice that can ultimately save you time and money.
We had an interesting case here at Bridging VAT. We were engaged by a medium size developer in the west of the UK, who had agreed to buy a pub in a small village. The pub had been owned by a building company who unfortunately went into administration, and the only asset the company had was being sold off.
Our client, who was informed that the pub was vatable, secured funding with us in a very short time frame of £61,200 to cover the VAT element. Using our services meant that he could keep his cash in reserve for the renovation work the pub required, and the additional creation of two apartments on the site of the old skittle alley that came with the property.
As part of our due diligence, we discovered that there was no evidence or confirmation of the seller’s option to tax, and the liquidator of the asset could not confirm this. This meant that at a later point, it could turn out that the property had not been opted-in to the VAT system, and that the £61,200 would NOT be reclaimable. HMRC has no obligation to return VAT payments on non-vatable purchases.
This would have left our client out of pocket to the tune of £61,200 and having to chase company liquidators for the return of the money, which they probably would have used to clear other debts held by the failed company.
At Bridging VAT Ltd, we pride ourselves on being ethical and doing the right thing for our clients, so our advice was not to pay the additional 20% upon completion, and keep our services available should a VAT element be required at a later date, in the process saving our client a very large sum of money.
If you’re buying an opted in property, or you have a client purchasing a commercial property which is Vatable, talk to the experts. Talk to Bridging VAT Ltd.
contact us on email at firstname.lastname@example.org or by telephone on 01206 645 050.