Call for Evidence: Simplifying the VAT land exemption

Following the Office of Tax Simplification (OTS) Publishing its report 'Value added tax: routes to simplification' in 2017, HMRC have launched a call for evidence to explore the simplification of the land and property VAT exemptions. 

The views of businesses are sought on the practical application of the current rules, and whether these rules can be simplified.

Supplies of land and property are exempt from VAT, subject to fifteen exceptions and twenty-six notes: the original legislation had only four exceptions. This is a sign of increasing complexity. 

The call for evidence is split into two sections: 

• The first looks at the history of the land and property VAT rules and considers the factors that drive the need for simplification.
• The second discusses possible solutions for the issues identified. 

Within these sections, HMRC are seeking views on a number of points, including: 

• Whether the Land and property VAT rules require simplification. 
• How minor and short-term interests in land should be defined and whether they should be subject to VAT. 
• The Option to tax. 
• Whether any currently exempt supplies should be subject to VAT or vice versa.
• Linking the VAT liability of interests in land to those recorded in Land Registers in each country. 

The call for evidence closes on 3 August 2021 and responses should be sent via email to This email address is being protected from spambots. You need JavaScript enabled to view it..

Useful guides on this topic

Land & Property VAT (Subscriber guide)
An outline of the VAT treatment of some of the more common supplies of land and property.

Land & Property: Dwellings
What is a dwelling for VAT purposes? What is the VAT treatment for construction, conversion, sale, and letting of a dwelling?

Land & Property: Non-residential
This guide considers the VAT treatment of the supply of non-residential property.

Opting to tax land and property
What is an option to tax? What do I need to do to opt to tax? What happens if I buy an opted property?

Land & Property VAT at a glance
A summary of VAT on common land and property transactions.

Land & Property: Relevant residential & relevant charitable purpose
What are the VAT rules for land and property that is used for a relevant residential purpose or a relevant charitable purpose? What are the claw back provisions affecting change of ownership or use?

External link

Call for Evidence: Simplifying the VAT Land Exemption

1) What is your experience of the VAT rules on land and property?

2) Are there any supplies that are particularly difficult to establish the correct liability for, leading to financial and administrative burdens? Please explain.

3) Do you think that the land and property VAT rules require simplification? Please explain why.

4) What are your views on the options presented in the OTS report? Do you agree with their assessment? 

5) What are the advantages and disadvantages of defining minor and short-term interests in land and property as subject to VAT?

6) How should a minor and short-term interest be defined?

7) What are your views on the option to make supplies of land and property subject to VAT apart from certain specified exceptions?

8) Which particular supplies of land and property should continue to be exempt from VAT if this option were to be considered further?

9) Are there any supplies that should be subject to VAT that are currently exempt or vice versa?

10) What are your views of linking the VAT liability of interests in land to those recorded in Land Registers in England, Scotland, Wales and Northern Ireland?

11) What are the potential advantages and disadvantages of such an approach?

12) Do you have any other suggestions on how the land and property VAT rules could be simplified?

13) Would you prefer to keep the VAT rules on land and property as they are? If so, please explain.