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  • Mortgages & Finance

    Commercial mortgage plus VAT issues

    Hi,

    I am looking at setting up a new business and seen ideal premises on sale for £1.05m plus VAT. The purpose is for a beauty salon.

    Can anyone recommend a good commercial mortgage broker. We may well need to do some works so I am wondering if a bridge/ developing loan would be a good option. Looking at the highest LTV as possible.

    Also, how do we treat the VAT as this will affect cashflow, as I know it will be payable but how long will it take to get the VAT back?

    Many thanks

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    AIUI the VAT is recoverable as input VAT at the end of the first VAT period following the purchase. Timing is significant if you are on quarterly returns!

    You need to have a couple of things in mind

    - is it being treated as a purchase of the building or as a transfer of a going concern?

    - SDLT is due on the VAT inclusive price

    seek professional advice (which this post is not)

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    It is just a purchase of the freehold building only. 


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