Andrew Needham outlines possible reasons and benefits of opting to tax a commercial property.
The sale and rental of property are normally exempt from VAT (under VATA 1994, Sch 9, Group 1). There are some exceptions to this, which are the sale of new residential property that is zero-rated and the freehold sale of new (less than three years old) commercial property which is standard-rated. The option to tax (under VATA 1994, Sch 10) allows a business to choose to charge VAT on the sale or rental of commercial property, that is to make a taxable supply out of what otherwise would be an exempt supply. Any option to tax does not affect a residential building or residential part of a building.
Why would you want to opt to tax?
The key to this is the ability to recover VAT on related costs. What you are doing is turning
