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VAT reclaim on commercial to residential conversion

Hi, I just recently bought a commercial property. It had permission to change it into a hotel. However we tried and obtained permission for residential units after exchanging contracts, it was not purchased subject to PP. If we did not get PP we would have converted it into a hotel. The vendor charged us VAT on the property, we offered to submit a 1614 6 months after we agreed terms/price but vendor refused to accept it and did not dissapply the tax as they would have had VAT liability from their end (Capital Goods Scheme). I have now submitted my VAT return to obtain a refund but now HMRC have said VAT was wrongly charged and they will not pay up. They will however pay up when the vendor submits and pays their VAT. I need to know if HMRC are correct and if so why? Does not the fact that: 1) Form 1614 was not given on time so thus vendor does need to charge 2) As we did not have any intention to convert into residential units from the start does this still count as intention to do a conversion 3) Is it normal for HMRC to wait for parties to pay back VAT before paying it back 4) Can I claim VAT back on the conversion works I would really appreciate your UK tax expert help.

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