My uncle owns an empty commercial building, which we are looking to convert into residential units. I have a background in property developing and project management. I am essentially going to be project managing the conversion for him, but not charging him. As this is going to be a big project with a lot of expenditure, I was wondering if it would be advantageous to set up a VAT registered limited company for the development. My thinking behind this is there will be a lot of money spent on building materials which are subject to VAT and potentially contractors who are VAT registered also, so by setting up a VAT registered limited company I can claim the VAT back on this. The company won't be making a profit as I am not charging him, it will be set up purely to save costs on the conversion by reclaiming the VAT spent. Is this as straightforward as I am hoping? 

In principle, when someone converts a non-residential property into a residential property, they can zero rate the sale of those completed residential units. If so, it is worthwhile you registering for VAT, because then you can reclaim a lot of the input VAT that you will incur. However there are many rules and conditions that apply to this scenario, and I would advise you to carefully look through section 5 of VAT public notice 708. If you get stuck, ring up the VAT helpline (on 0300 200 3700).