Topic: Car Parking VAT, Partial Exemption
Would appreciate some expert advice on VAT (Partial Exemption) please, for a brief description see below:-
A Property Developer, which is VAT registered as Partially Exempt, is refurbishing a Car Park on its estate - which is located behind several properties & serves the general public. The properties that are in the closest vicinity of the Car park are a mix of Commercial/Residential buildings & also a mix of Opted to tax properties/non opted to tax properties.
To date the developer has been processing the input tax from the contractor & associated professional fees into its residual input tax & reclaiming a portion (based on the partial exemption % mix) of the input tax, however this has been questioned lately within the office & challenged as to whether this is the correct approach. The challengers thoughts are that since Car Parking is a service & standard rated, that the development of the Car Park should also be standard rated & hence 100% of the input tax be reclaimable
Can I have your thoughts please.
Many Thanks in advance