Martin Scammell
Martin Scammell is an independent VAT consultant, specialising in property and construction matters, who works with tax departments in major corporates and universities, and with a number of law and accountancy firms. He is the author of the leading reference work on VAT and property.
Martin started out in VAT Policy in Customs & Excise, was a Partner at Ernst & Young, where he headed up the VAT real estate group, and then became head of indirect tax at Eversheds.
He has been involved in the development of VAT legislation and policy over many years, and regularly serves on working parties established by HMRC. He was a member of the Office of Tax Simplification’s consultative committee for their review of VAT in 2017, and in 2018-19 of HMRC’s external stakeholder group considering the proposed reverse charge for building work. Martin currently works with HMRC as technical secretary to the British Property Federation’s VAT Committee, as an adviser to the British Universities’ Finance Directors’ Group and as a member of HMRC’s Joint VAT Consultative Committee and VAT Land and Property Liaison Group. He is a member of the Chartered Institution of Taxation’s indirect taxes and property taxes committees.
Practice Area
Panel
- Contributing Author
27 Contributions by Martin Scammell
PRACTICE NOTES
UK VAT: Zero-rating for first grants by persons constructing relevant charitable purpose (RCP) buildings—conditions, certification, construction scope, input tax and change-of-use/self-supply
This Practice Note addresses the zero rate of VAT available to developers who sell or grant leases of specific buildings they have built, where the property is designed for charitable use. Such properties are termed buildings for a relevant charitable purpose (RCP). This Practice Note contains citations to case law of the EU Court of Justice. For advice on whether rulings of the Court of Justice bind the UK courts, see Practice Note: Assimilated law—Assimilated case law. For commentary on assimilated law (previously retained EU law) and tax more broadly, including the bespoke approach now applied to VAT legislation, see Practice Note: Assimilated law and tax. The Court of Justice decisions cited in this Practice Note were issued before the end of the implementation period (which the UK entered on 31 January 2020 and which concluded at 11 pm on 31 December 2020).
Why does zero-rating matter?
If the zero rate is unavailable, the supply will ordinarily be exempt, with the result that the developer cannot reclaim VAT (ie input tax) on related costs—for example, the construction of the building, professional fees and potentially the purchase of the site...
Tax
PRACTICE NOTES
UK VAT: Zero-rating of developers' first sales and long leases of relevant residential purpose buildings - conditions, certification, construction, input tax, CGS and change-of-use self-supply
This Practice Note addresses VAT zero-rating available to developers who sell or let residential buildings, other than dwellings, that they have built. Such properties are classed as buildings for a ‘relevant residential purpose’ (RRP). For guidance on the zero-rating of dwellings, see Practice Note: Zero-rated sales and leases—person constructing a dwelling.
Why does zero-rating matter?
If zero-rating is not in point, the supply will ordinarily be exempt, meaning the developer is unable to reclaim VAT (ie input tax) on expenditure, including construction costs, professional fees and potentially the purchase of the site. For further detail, see Practice Note: When can a person recover VAT?
There is also a zero-rating for constructing an RRP building, but only where the works are commissioned by the ultimate user, for example the operator of a care home. The zero-rating considered in this Practice Note is an alternative: a person constructing such a building for occupation by others will bear VAT on the build, but can recover it via a zero-rated sale or lease...
Tax
PRACTICE NOTES
VAT in UK residential development: zero-rating, short leases, holiday homes, planning obligations, incentives, surplus land, golden brick, TOGCs, CGS, partial exemption, overriding leases and reversions
VAT issues that arise in residential developments
This Practice Note examines VAT matters encountered in residential development projects. It addresses, among other points, the following areas:
different and varying forms of development
the potential consequences of granting short-term leases
relevant planning obligations and local infrastructure
various incentives available to buyers
disposals of surplus land and incomplete developments,
matters arising from subsequent grants of overriding leases and sales of reversions
For VAT considerations in commercial schemes, see the separate Practice Note: Commercial development—VAT issues.
This Practice Note also includes references to case law from the EU Court of Justice.
For further guidance on whether rulings of the Court of Justice bind the UK courts, see Practice Note: Assimilated law—Assimilated case law.
For commentary on assimilated law (previously retained EU law) and tax more broadly, including the bespoke approach now applied in VAT law, see Practice Note: Assimilated law and tax.
The Court of Justice decisions mentioned here were handed down before the end of the implementation period (which the UK entered on 31 January 2020, and which ended at 11 pm on 31 December 2020)...
Tax
PRACTICE NOTES
VAT on residential service charges: landlords’ supplies, HMRC concession (management/commonhold/RTM/factors), sinking funds, utilities, water, insurance, optional services and holiday accommodation
This Practice Note outlines VAT treatment of residential service charges.
Service charges payable to landlords
Where a lease or licence requires the occupier to pay service charges to the landlord, they are treated in the same way as the rent for VAT purposes. The reason is that there is no distinct supply: rent and service charges together constitute the consideration for granting serviced accommodation. In effect, both elements amount to a single payment for a letting. Consequently, service charges linked to residential property are normally exempt. The tenant therefore bears no VAT, while the landlord cannot reclaim VAT on associated expenditure. By contrast, service charges connected to holiday accommodation will normally be subject to VAT on the same basis as the rent (see Practice Notes: Exclusions from the exemption from VAT for land and buildings—Hotel and similar accommodation, and Exclusions from the exemption from VAT for land and buildings—Holiday accommodation)...
Tax
PRACTICE NOTES
VAT treatment of UK property development and investment vehicles: companies, partnerships, LLPs, REITs, co-ownership and joint ventures - registration, option to tax and intra-party supplies
This Practice Note addresses the VAT treatment of partnerships, joint ventures and other vehicles in the context of property development and investment. It considers:
companies, general partnerships, limited partnerships, limited liability partnerships (LLPs), real estate investment trusts (REITs), co-owners and joint ventures
which entity must be VAT registered
which entity should opt to tax
the treatment of dealings between the parties
contributions and distributions
dealings with third parties
Why does this matter?
It is often not obvious how collaborative arrangements should be treated for VAT purposes, or who ought to charge VAT to whom. In some situations the position is genuinely uncertain, and the VAT supplies may fail to mirror commercial reality. It is therefore vital that contracts address the position adequately.
Companies
A company is a comparatively straightforward vehicle for owning property, and the points serve as a reference for contrasting with other entity types.
Registration and option to tax
A company is separate from its shareholders. It registers for VAT, and makes any option to tax, in its own capacity...
Tax
CHECKLISTS
UK property VAT: practitioner checklist for leases, assignments, surrenders, freehold sales, and commercial and residential developments (including TOGCs, option to tax, zero-rating, CGS, reverse charge and overage)
This checklist outlines the principal VAT points to review on property transactions. Matters under ‘all property transactions’ should always be tested in every instance, then followed by those linked to the specific deal type (grant of a lease, assignment or surrender of a lease, freehold sale, commercial development, or residential development). Topics listed for the grant, surrender or assignment of a lease, and the sale of freehold land, can also be pertinent to any development transaction. For fuller commentary on the VAT issues signposted in this checklist, refer to the VAT on property subtopic and, in particular, the Practice Notes mentioned in this checklist.
Type of property transaction
Key VAT considerations
All property transactions
Is the transaction a transfer of a going concern (TOGC)? If so, there is no supply for VAT purposes and therefore no VAT is payable. For more detail, see Practice Note: VAT—transfers of a going concern involving land and buildings.
Where the deal involves a supply of land and is not a TOGC, confirm whether the supplier has exercised the option to tax that land?...
Tax
FLOWCHARTS
UK VAT place of supply rules for land and property services—flowchart for domestic and cross-border scenarios
Flowchart
This flowchart explains the VAT place of supply rules for services when those services relate directly to land or property...
Tax
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