Residential Conversion

Client: Property Developer
Project Value: £10 million
Estimated VAT Savings: £1.6 million
Location: Bath BA1

Overview

Landmark PT advised on the VAT treatment for the conversion and extension of a former university building into a series of high-end private residences. The project involved multiple trade contractors and extensive design input across structural, architectural, and interior packages. Some properties were sold as ‘shells’ for private individuals to fit out. e advised a number of owners on VAT liabilities and DIY converter VAT reclaims

VAT Issues

The project presented a range of VAT challenges, including:

  • Applying the 5% reduced rate for the conversion of a non-residential property into a dwelling.

  • Managing mixed-rate supplies for new build extensions (zero-rated) and retained elements.

  • Ensuring correct treatment for fitted joinery, bespoke kitchens, AV systems and interior finishes subject to 20% VAT.

  • Implementing cost apportionments across contractors where multiple rates applied.

  • Advising on the procurement and contractual structure to support correct VAT application throughout the works.

  • Dealing with VAT recovery issues for the property developer

  • Dealing with the VAT reclaims for private individuals purchasing ‘shells’ for bespoke fit outs

Our Role

We worked directly with the project’s quantity surveyor, architect, and main contractor to:

  • Analyse the works and apportion costs between 0%, 5%, and 20% VAT rates.

  • Prepare detailed VAT schedules for contractors to follow during billing.

  • Advise on procurement documentation to maintain compliance and maximise VAT efficiency.

  • Provide ongoing project support and VAT verification as works progressed.

Outcome

Through detailed analysis and proactive involvement, the client achieved an estimated £1.6 million VAT saving across construction and professional costs, ensuring compliance with HMRC requirements while maximising available VAT reliefs.