Recovering the standard rate VAT you pay on professional fees

Did you know that you could recover the standard rate VAT you pay on professional fees on your new-build residential schemes?

This is achieved by establishing a non-vat grouped, wholly controlled subsidiary company to act as a design and build company (D&B Co). D&B Co would be able to reclaim input tax on 20% vat-rated professional fees and re-charge them to you at zero rate.

You will need a suite of contract documents which we can prepare for you.

These include:

  • an overarching framework development agreement between yourself and D&B Co under which you will tell D&B Co which of your schemes it must take on. This can be either by taking a novation from you of contracts on qualifying existing schemes (you can save VAT on your existing schemes provided they have not reached practical completion); or by undertaking new schemes on your behalf;
  • a service level agreement (so that D&B Co can purchase corporate services either from you or other companies within your group) or a cost share agreement (so that you can agree to share certain costs with D&B Co); and
  • a loan agreement between you and D&B Co (so that you can provide it with start-up funds).

You will need expert VAT advice and we have an established working relationship with all key advisers who are currently advising on VAT savings.

We can advise you about every aspect including checking loan agreements, advising on novation agreements, giving collateral warranties after novation, whether or not to grant security for D&B Co’s obligations and all governance aspects. We can also establish D&B Co and deal with its registrations on your behalf. If you require any further information please contact Susannah Davis or Gareth Hall, who have extensive experience of advising on VAT savings structures.

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