The sector is to challenge the Inland Revenue over its plan to charge corporation tax on VAT structures that saved stock transfers £450m last year.
Accountant KPMG and the National Housing Federation are seeking a meeting with the Inland Revenue to discuss the ruling.

The body made the decision after a previous discussion with KPMG and the federation (HT 5 September, page 15).

At that meeting the two groups thought they had persuaded the Inland Revenue of the case for schemes, known as VAT shelters, that allow new transfers to reclaim VAT on repairs.

But in a written reply, the Inland Revenue suggested that the schemes would still attract corporation tax. KPMG and the federation hope to challenge this decision.

Mike McGowan, tax partner at KPMG, said: “I want to understand more about why they think what they think.

“We want to share views and see if there is the possibility of an alternative decision.”

Source

Housing Today