There are special VAT rules that allow businesses to standard rate the supply of most non-residential and commercial land and buildings (known as the option to tax). This means that subsequent supplies by the person making the option to tax will be subject to VAT at the standard rate.The ability to convert the treatment of VAT exempt land and buildings to taxable can have many benefits. The main benefit, is that the person making the option to tax will be able to recover VAT on costs (subject to the usual rules) associated with the property including the purchase and refurbishment of the property.If you make changes to a building (such as an extension) after you have opted to tax then the option to tax will usually apply to the whole of the extended building. However, care needs to be taken for linked buildings and forming a complex where the option to tax will not always apply depending on the exact circumstances. It is also possible to exclude a new building from the effect of an option to tax where the building is constructed on land that has been the subject of an option to tax. Care should be taken before making a final decision as this can affect entitlement to input tax recovery on associated costs. It is important to remember that once an option to tax has been made, it can only be revoked under certain limited circumstances.