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HMRC internal manual

VAT Construction

Changing the use or disposing of certificated buildings - buildings completed on or after 1 March 2011: how do you account for VAT on a self-supply?

The person concerned must account for VAT on a self-supply as output tax but can also recover some or all of this output tax as input tax if the non-qualifying use is a taxable activity - that is, one that involves making taxable or other supplies with input tax credit.

Note: Should the ‘change in use’ come about because of a grant made of all or part of the building, the supplies arising from that grant must also be accounted for in the normal way for VAT purposes. If these supplies are taxable, some or all of the VAT on the self-supply charge can be attributed to those supplies and be deductible as a result.