Working from home and VAT

[Barend]

Is there a risk when claiming proportionate input VAT on water and lights on a home office that you will be liable for output VAT when you sell your property ? I believe the VAT on the cost of renovations specifically of the office portion of your home will definitely cause this.

[Dave A]

Is the bill addressed to the registered VAT vendor?

[Barend]

Hi Dave , yes. He is a sole proprietor who works from home. Bona fide business occupying a clearly identifiable portion of the house(40%). Thanks for your time.

[Dave A]

As the individual is a registered VAT vendor I don't see a problem with claiming the input VAT for the income generating portion of the cost. Unforunately when it comes to selling a property owned by this sole proprietor, the disadvantages of registering as a VAT vendor in the form of a sole proprietor are going to kick in pretty much regardless. It's one of the reasons I'm no fan of registering for VAT in the form of a sole proprietor.