Property OTT – past VAT recovery

[Williams]

A partially exempt business buys a property OTT (hence VAT charged) but the initial intention is to use it only for NB or exempt purposes (so they do not bother to OTT), hence no VAT reclaimed and no CGS adjustments so far, but 4-5 years down the line the business changes its mind and want to start using the building for purely commercial rent purposes and decides to OTT the building so it could charge VAT and reclaim VAT on any expenses, repairs etc. Is there any possibility to reclaim the original VAT in this situation or the only way is to recover part of it through the CGS? I think the CGS is the answer but I would like a confirmation from someone more experienced in this field.
Thank you.

[Author]

Posts